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8.2.2. Withholding Taxes

The withholding tax rates levied on income received / derived by the non-residents from sources within Tanzania, unless reduced under a tax treaty, are as below:

Dividend

Tax is withheld at the rate of 10% on dividends paid by unlisted resident entities and 5% on dividends paid by listed entities to non-residents. Further, 10% withholding tax applies on dividends paid to a non-resident company holding 25% or more of shares or voting rights in the distributing resident entity.

Interest

Tax is withheld at 10% on interest paid by Tanzania resident entities to non-residents. Effective 1 July 2018, withholding tax does not apply on interest paid by the Government to a non-resident bank or financial institution, subject to exceptions. Effective 1 July 2022, interest paid to a non-resident holder of corporate or municipal bonds that are issued and listed on the Dar es Salaam Stock Exchange is exempt from withholding tax.

Royalty Copyright

Tax is withheld at the rate of 15% on royalties paid to non-residents. Effective 1 July 2022, royalty payments for the use of, or right to use, a cinematography film, videotape, sound recording, or any other like medium are subject to withholding tax at the rate of 10%.

Royalty Patent

Tax is withheld at the rate of 15% on royalties paid to non-residents.

Royalty Trademark

Tax is withheld at the rate of 15% on royalties paid to non-residents.

Service Management

Tax is withheld at the rate of 15% on service management fees paid by resident entities, including mining companies, to non-residents.

Service Technical

Tax is withheld at the rate of 15% on service technical fees paid by resident entities, including mining companies, to non-residents.

Others

Tax is withheld at the rate of 5% on insurance premiums paid to non-residents. Tax is withheld at the rate of 10% on rental payments made to non-residents. Tax is withheld at 15% on fees paid to non-resident directors. Tax is withheld at 15% on payments made for natural resources to non-residents.

Below is a discussion of domestic withholding tax rules for most of the common cross border payments.

Capital Gains 30.0 %
Dividends 10.0 %
Interest 10.0 %
Royalty Copyright 15.0 %
Royalty Patent 15.0 %
Royalty Trademark 15.0 %
Sales 0.0 %
Service Management 15.0 %
Service Technical 15.0 %

* Rates are current as of 04 December 2022