Tanzania
Overview
A supply of electronic services delivered from outside Tanzania to a customer that is not registered for VAT in Mainland Tanzania at the time when the service is provided is subject to VAT in Tanzania. The person responsible for accounting for the VAT is the supplier of such services. Initially, the VAT legislation required non-resident suppliers of electronic services to appoint a local representative for compliance purposes. The Finance Act, 2022 (FA 2022) introduced changes to the VAT legislation to allow non-resident electronic service providers to register for VAT (in accordance with procedures prescribed in the Regulations) without requiring a local VAT representative (i.e. simplified registration). The Regulations were subsequently issued and provided, among other components, the scope, registration, filing and payment requirements, penalties, interest and offences.
The Regulations are effective from 1 July 2022, providing a grace period of six months (see Regulation 4(7) for nonresident suppliers to register (i.e. at the latest by 1 January 2023)).
A non-resident supplier of electronic services would have to check whether their customers are VAT registered or not to determine whether they have VAT obligations in Tanzania. While there is no legislated mechanism for doing so, we recommend that the non-resident supplier collects the VAT Registration Number (VRN) and VAT Registration certificate from their customers. There is no publicly available portal to check such information.
