Branches of foreign entities carrying on taxable or other activities in Tanzania are required to register and charge VAT with respect to their supplies.
All non-resident companies not operating nor registered in Tanzania are required to appoint a VAT representative in Tanzania to represent the company in dealings with the tax authorities. Failure to appoint a representative results in the resident customer becoming liable for payment of VAT by application of a reverse-charge mechanism.
Effective 1 July 2022, non-resident suppliers providing electronic services to an unregistered person (B2C) in Tanzania are required to register (within 6 months from 1 July 2022) for VAT (the place of supply of service being considered as Tanzania) irrespective of meeting the registration threshold. In case the non-resident provider of electronic services does not appoint a tax representative, then they are required to apply for registration as a taxable person.
“Electronic services” include any of the following services provided or delivered through a telecommunications network:
(a) Websites, web-hosting, or remote maintenance of programs and equipment;
(b) Software and the updating thereof;
(c) Images, text, and information;
(d) Access to databases;
(e) Self-education packages;
(f) Music, films, and games, including gaming activities; and
(g) Political, cultural, artistic, sporting, scientific, and other broadcasts, and events including broadcast television.
The supply of electronic services by a non-resident to an unregistered person is considered as a supply delivered in Mainland Tanzania if the recipient of the services is in Tanzania. A recipient is deemed to be in Tanzania if:
- The payment proxy including credit or debit card information and bank account details of the recipient of the electronic services is in Tanzania; or
- The resident proxy including the billing or home address or the access proxy including the internet address or mobile country code of the SIM card of the recipient is in mainland Tanzania.
Non-residents registered for VAT are required to file a return and make the corresponding VAT payment electronically on a monthly basis within 7 days of the following month. No input tax may be claimed.