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Tanzania

services relating to cultural, artistic, sports, scientific, educational, entertainment fairs and exhibitions, including the supply of services of organisers of such activities but only when such services are physically carried out outside Tanzania;

  • the supply of services of valuation of and work on movable tangible property but only when such services are physically carried out outside Tanzania;

  • the supply of ancillary transport activities such as loading and unloading, handling and similar activities, but only when such services are physically carried out outside Tanzania;

  • the supply of certain specified services connected with immovable property, but only when the immovable property is located outside Tanzania;

  • the supply of services rendered by an intermediary acting in the name and on behalf of another person when the underlying transaction is supplied outside Tanzania;

  • the supply of services of consultants, engineers, lawyers, accountants and other similar services, as well as data processing and the provision of information, but only when such services are supplied to a person other than a related person who is established or has his permanent address or usually resides outside Tanzania, provided that such services are not related to a business established or to be established in Tanzania; and

  • the supply of telecommunication services, radio and television broadcasting services but only if effective enjoyment of such services takes place outside Tanzania.

Taxable supplies of services not falling within the above categories are taxed at the standard rate.

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Refunds to foreigners

No tourist refund scheme applies in Tanzania. Foreign companies without a VAT registration in Tanzania cannot get a refund of Tanzanian VAT.

Place, time and value of supplies

Place of supply

Goods are deemed to be supplied in mainland Tanzania if their supply:

  • does not involve their removal from or to mainland Tanzania; or

  • involves their installation or assembly at a place in mainland Tanzania to which they are removed.

Goods are deemed to be supplied outside mainland Tanzania if their supply involves their installation or assembly at a place outside mainland Tanzania to which they are removed.

Services are deemed to be supplied in mainland Tanzania if the supplier of the service has:

  • a place of business within mainland Tanzania and nowhere else;

  • no place of business in mainland Tanzania or elsewhere but his usual place of residence is in mainland Tanzania;

  • places of business in mainland Tanzania and elsewhere, but the place most concerned with the supply is in mainland Tanzania.

Time of supply

The time at which a supply of goods or services is treated as taking place, and hence the date on which the tax on the supply becomes chargeable, is called the ‘tax point’. The rate of tax to be charged is the rate in force at the tax point, and the supply must be accounted for in the return period in which the tax point occurs.

For goods, the time of supply is the earlier of:

  • if the goods are to be removed, the date of removal;

  • if the goods are not to be removed, the date they are made available to the customer;

  • the date a tax invoice is issued; or

  • the date payment is received for all or part of the supply.

For services, the time of supply is the earlier of:

  • the date the service is performed or

rendered;

  • the date a tax invoice is issued; or

  • the date payment is received.

In the case of a metered service, where there is no recognisable completion date, a tax point occurs each time the meter is read, a tax invoice is issued or payment is received, whichever happens first.

For imports of goods, VAT must be paid at the time the customs duty is payable.

Value of supply

If the supply is for monetary consideration, the value of the supply is taken to be the taxable consideration.

If the consideration is not monetary or only partly monetary, the value of the supply is the open market value. Open- market value is deemed to be the value that the goods or services would fetch in the ordinary course of business, where the supplier and purchaser are not connected. In this respect the law assumes that:

  • the goods have been delivered;

  • the recipient will bear the cost of freight, insurance and other costs incidental to the supply and delivery of the goods;

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