Jul 2023 extension of digital services subject to VAT; new return filing deadline
The 2023 Finance Bill has widened the VAT net on digital services. From 1 July 2023, electronic services will now include digital intermediation services and online advertising services.
The deadline for filing a VAT return for non-resident providers of digital services has been extended to the 20th of the month following the reporting period. It had been previously the 7th of the subsequent month.
Jan 2023 – Simplified VAT registration portal for foreign providers of digital services opens
The Tanzanian Revenue Authority has launch in 2023 a simplified VAT registration web portal for non-resident providers of digital or electronic services to local consumers. To apply, the applicant needs back corporate background and incorporation documents, as well as (for example) Director passport copies.
July 2022 – 18% VAT and 2% income tax on electronic services extended to foreign providers
1 July 2022 Tanzania 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):
- Advertising services
- Digital intermediary
- Download or streaming video and music
- Cloud or SaaS-based software
- Data storage and processing
- Database access
- E-news and journals
- 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|
|Cameroon||19.5%||Jan 2020||XAF 50 million|
|Egypt||14%||Sep 2016||EGP 500,000|
|Ghana||12.5%||Apr 2022||GHS 200,000|
|Kenya||16%||Sep 2013||-||Registration threshold removed 2023|
|Oman||5%||Apr 2021||OMR 35,000|
|Saudi Arabia||15%||Jan 2018||Nil|
|Senegal||18%||Jan 2023||Nil||Fiscal representative required|
|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|