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Tanzania VAT on digital services extended to non-residents

18% VAT and 2% income tax on electronic services extended to foreign providers from July 2022

Tanzania has this month, July 2022, extended VAT charging obligations to providers and facilitating marketplaces for digital services to local consumers. This also includes potential 2% income tax liabilities.  There is no VAT registration threshold. Any effected businesses must now register before the end of 2022.  Once registered, returns are due each month by the seventh of the month following.

The obligation on local providers has been in place since 2015.

July 2015 – VAT on resident providers of digital services

Tanzania implemented its Value Added Tax regime on digital and electronic services in July 2015. However, foreign providers or marketplaces supplying consumers were not able to VAT register. For B2B supplies, there should be a self-assessment raised. There are no special rules for the supply of digital services in Tanzania.

The current VAT rate in Tanzania is 18%. VAT Calc’s global VAT and GST on digital services blog keeps a live update on how countries are imposing indirect taxes on non-resident providers and electronic marketplaces.

What digital services are taxable in Tanzania?

Income from the supply of the following digital services are liable to Tanzanian VAT (According to S.51(2) of the VAT Act):

  • Download or streaming video and music
  • Cloud or SaaS-based software
  • Data storage and processing
  • Database access
  • E-news and journals
  • E-learning
  • Online gambling
  • Online gaming
  • Websites, hosting
  • Images and text
  • Broadcast TV

Determining if Tanzanian VAT is due

To establish if the place of supply, and therefore VAT due, is Tanzania, providers or marketplaces may use either of the following pieces of evidence of consumption in Tanzanian:

  • Credit card address
  • Billing address
  • SIM, IP or similar address
  • Mobile country code

Africa & Middle East VAT on digital services

Comments (click for details) Rate Date Threshold Comments
Algeria 9% Jan 2020 Nil
Angola 14% Oct 2019
Bahrain 10% Jan 2019 Nil
Cameroon 19.5% Jan 2020 XAF 50 million
Egypt 14% Sep 2016 EGP 500,000
Ghana 12.5% Apr 2022 GHS 200,000
Israel 17% 2022 Proposal in 2021/22 budget
Ivory Coast 18% 2022 -
Kenya 16% Sep 2013 KES 5million
Kuwait 5% Jan 2023? - TBC
Mauritius 15% 2020
Nigeria 7.5% Jan 2020 $25,000
Oman 5% Apr 2021 OMR 35,000
Rwanda 18% TBC
Saudi Arabia 15% Jan 2018 Nil
South Africa 15% Jun 2014 ZAR 1 million
Tanzania 18% Jul 2022 Nil Residents since Jul 2015
Tunisia 19% Jan 2020 Nil Withholding VAT; 3% Royalty Tax
Uganda 18% Jan 2020 UGX 150m
United Arab Emirates 5% Jan 2018 AED 375,000
Zimbabwe 14.5% Jan 2020 Nil

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