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13.5. Other Anti-Avoidance Rules

Beneficial Ownership Register

Effective 1 July 2020, Tanzania introduced the maintenance of register of beneficial owners for the purposes of exchange of information to combat tax avoidance. Effective 1 July 2022, the definition of beneficial owner is amended to harmonize it with the definition under the Anti-Money Laundering Act. A ‘beneficial owner’ is a natural person who:

  • Directly or indirectly ultimately holds 5% or more of shareholding or owns an interest of 5% or more or exercises substantial control over an entity or an arrangement. As a result of harmonization of the definition of a beneficial owner, it is clarified that the shareholding or voting rights or ownership interest of 5% or more in a legal person would be an indication of direct ownership in that legal person or a shareholding of 5% or more or an ownership interest of 5% or more in the legal person held by another legal person, which is under the control of a natural person, or by multiple legal persons, which are under the control of the same natural person, shall be an indication of indirect ownership;
  • Has a substantial economic interest in or receives a substantial economic benefit from an entity or an arrangement directly or indirectly whether acting alone or together with other persons;
  • On whose behalf an arrangement is conducted; or
  • Exercises significant control or influence over a person or arrangement through a formal or informal agreement.

The identity of the beneficial owners is required to be disclosed along with name and address or the registered office of the beneficial owner, nationality, passport number, or other appropriate identification and proof of identity, nature of the interest including the details of the legal, financial, security, etc.

Penalties

Effective 1 July 2022, failure to update information on beneficial owners may attract a penalty of TZS 100,000 and an additional penalty of TZS 10,000 per day of continuing default in respect of:

  • Failure to maintain a register of members and beneficial owners or notify the Registrar of Companies of any changes;
  • Failure to keep an index of names of the members of the company if more than 50 members; and
  • Failure to file an annual return with the company registry within 28 days of the return due date.