Overview
A supply of electronic services delivered from outside Tanzania to a customer who is not registered for VAT in Mainland Tanzania at the time the service is delivered, is subject to VAT in Tanzania. In such cases, the supplier is responsible for accounting for VAT.
The Finance Act, 2022 (FA 2022) introduced changes to the VAT legislation to accommodate the taxation of non-resident electronic service providers. These amendments require non-resident suppliers to register for VAT (in accordance with procedures prescribed in the issued Regulations) without the need to appoint a local VAT representative (i.e. simplified registration).
The Regulations, which came into effect on 1 July 2022, provided a grace period of six months (see Regulation 4(7)) for non-resident suppliers to register (i.e. by no later than 1 January 2023).
In practice, a non-resident supplier of electronic services would have to check whether their customers are VAT registered or not to determine whether they have a VAT obligation in Tanzania. While there is no legislated mechanism of doing so, it is recommended that the non-resident collects the VAT Registration Number (VRN) and VAT Registration certificate from their customers. There is no publicly available portal to check such information.
Key provisions applicable to VAT on ESS
| Particulars | Description |
| Scope | Unregistered persons (regardless of whether they are B2B or B2C) |
| Liability to remit VAT | Non-resident supplier |
| VAT rate | 18% |
| Taxable value | Sales value including any duty, levy, fee, charge (exclusive of VAT) |
| Effective date | 1 July 2022 |
| VAT registration threshold | No threshold |
| Tax invoice | Currently, there are no explicit invoicing requirements for non-resident supplying digital services. However, see further details on the “invoicing” section below. |
Services in scope
The scope of electronic services includes the following as defined under section 51(2) of the Value Added Tax Act, Cap 148 (VATA):
“electronic services” means any of the following services provided or delivered through a telecommunications network-
- Websites, web-hosting, or remote maintenance of programmes and equipment
- Software and the updating thereof
- Images, text, and information
- Access to databases
- Self-education packages
- Music, films, and games, including gaming activities
- Political, cultural, artistic, sporting, scientific, and other broadcasts and events including broadcast television
- Online intermediation services
- Online advertisement services
- Online data services
- Any other service of a similar nature delivered through internet or a telecommunications network.
The Regulations expound on the above definitions.
The residual category in item (k) above effectively creates an open-ended definition. Non-resident suppliers of digital services should therefore carefully assess whether their offerings fall within scope, even if not expressly listed.
Digital intermediaries
Effective from 1 July 2026, where an electronic service is supplied to an unregistered person in Mainland Tanzania by a digital intermediary through online intermediation services or any other digital marketplace, the operator of such platform is deemed to be the supplier of the service for VAT purposes. This therefore means that the VAT compliance obligation rests with the platform operator rather than the underlying service provider.
Registration and compliance
The simplified registration portal for non-residents suppliers is available for use and can be accessed online here. To complete the registration process, the following information should be provided:
- The legal name of the business, including the business trading name
- The applicant’s Certificate of Incorporation issued in the non-resident’s home country
- The name of the contact person responsible for tax matters
- The registered address of the business
- The contact person’s telephone number of the contact person
- The email address of both the business and the contact person
- The website or uniform resource locator of the supplier through which the business is conducted.
Any other additional information not listed in the Regulations is also required, for example social media information and the passport number of the contact person.
Invoicing
The Electronic Services Regulations exempt non-resident registrants from having to acquire and use electronic fiscal devices for invoicing purposes. There are no explicit invoicing requirements for non-residents supplying digital services. However, there is a general rule on tax invoice requirements covered under Section 90 of the VATA. These requirements are as follows:
- Date of issue;
- Name of the supplier;
- Taxpayer Identification Number (TIN) of the supplier (once registered for VAT, a TIN will also be issued to the supplier);
- Value Added Tax Registration Number (VRN) of the supplier;
- Description, quantity, and other relevant specifications of the services supplied; and
- The total consideration payable for the supply and the amount of VAT included in that consideration.
Please note that it is unclear at this point whether the non-resident suppliers are required to abide by the above requirements for invoicing purposes as there is no exemption from these requirements nor any special rules. To be prudent, we would recommend that the non-residents include this information in their invoices.
VAT on costs
Non-residents cannot recover VAT on costs.
Other considerations
Digital Service Tax (DST)
A non-resident supplier is required to account for DST on a monthly basis at the rate of 3% (2% being applicable for periods prior to July 2026) of the turnover or gross payment received from a customer where electronic services are supplied to a resident individual customer (i.e. B2C). On the other hand, DST does not apply where the service is supplied to a resident business (i.e. B2B), regardless of whether the business is registered for VAT or not as the business customer will be required to apply withholding tax.
VAT on cryptocurrency/digital assets
Currently, Tanzania does not have specific VAT rules or regulations relating to cryptocurrency-related activities or digital assets.
Excise Duty
Effective from 1 July 2026, non-resident providers of specified electronic services delivered through the internet to unregistered (excise unregistered) consumers in Tanzania are subject to excise duty. The services in scope and applicable rates are:
| Service | Rate |
| Electronic communication services | 17% of dutiable value |
| Pay-to-view television services (including subscription VOD streaming) | 7% of dutiable value |
| Commercial advertisement on betting, gaming, or lotteries services | 10% of charges/fees |
| Money transfer and payment services | 10% of charges/fees |
Non-resident service providers within the scope are required to register with the Commissioner General within 90 days of the regulations coming into effect (i.e. by 29 September 2026), file monthly electronic returns by the 7th of the following month, and pay excise duty in Tanzanian Shillings.
On a related note, registered non-resident providers are exempt from using electronic fiscal devices for invoicing purposes.
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