TANZANIA BUSINESS GUIDE-DTA'S
Commerce:
Business Guide
Business Registration
Trade Agencies
Tanzania Bureau of Standards
Weights and Measures
Industrial Court
Business Guide
This Guide is intended to present brief background information on Tanzania with emphasis on its economy, investment regime, incentives and to serve as a primary guide for prospective investors.
1. Business guide to Tanzania
General approval permits & licenses.
To set up business in Tanzania, General Approvals, permits and licenses are required. However, for investors who pass through Tanzania Investment Centre (TIC) facilitation of these requirements will be processed by the Centre.
Company registrationPrincipal forms of business organization are sole proprietor. partnership. joint venture. incorporated company and registered branch of overseas companies. All companies must be registered in Dar es Salaam.
a) Registrar of companies
Contact;Co-operative Buildings10th Floor,Lumumba StreetP.O. Box 9393,Dar es Salaam.
Telephone.: 255-55-180385, 180113, 180371, 188344
This is the first contact an investor makes in registering business in Tanzania.Private companies must have a minimum of two shareholders.
· Application processThe application process varies depending on the entity being registered
· Trade namesApply by letter to the Registrar.
· Private companiesPrepare Memorandum and Articles of Association once the trade name has been accepted. Lawyers are available to assist investors.
Several forms are required to be filled and submitted to the Registrar. These include application, list of directors, details of nominal shares, particulars of director or managers, notice of situation of office etc.
· Foreign branchProvide a certified copy of the company charter, Memorandum & Articles of Association from the Country of origin and information provided above.
· Trade/Service marks: Pay registration fees and place the advertisement in the Official Gazette.
· FeesCertificate of Compliance US$ 800, Certificate of Incorporation TShs. 240,000
Registration with Income Tax Department: - Tanzania Revenue Authority
Contact;CommissionerIncome Tax DepartmentTanzania Revenue AuthorityEast African Community BuildingP.O. Box 9131Dar es SalaamTel: 255-22-29533 or 38811
Once a business has been registered with the Registrar of Companies it is required to register with the nearest Tanzania Revenue Authority (TRA) office. Once registration formalities have been completed a file Number is established.
Information on taxation matters for all types of business enterprises
(i) Personal income taxesTanzania uses a progressive personal income tax for monthly income over TShs 30.000. Marginal tax rates peak at 35 percent assessed in monthly income. All employers are required to collect income tax for the Government from employees.
(ii) Housing levyA Housing levy of four percent of gross emoluments is collected by the TRA
(iii) Corporate income taxOnce a file number has been established, the business is expected to complete Provisional Tax Return form. The provisional tax return must be submitted within three months of the beginning of the starting accounting date; the provisional tax is payable quarterly.
A Final Tax Return form must be submitted 'within a period not exceeding nine months from the date of the final audited accounts of business’.
The corporate income tax rate is 35 percent for both resident and non-resident companies. (This is not the rate applicable to TIC certificate holders).
Exemptions from payment income tax can be requested by letter from the Commissioner of Income Tax.
(iv) Wear and tear deductionsThere are three rates of wear and tear deductions allowed depending on the type of equipment. Class 1-- tractors, combine harvesters, and heavy, self-propelled equipment -- is allowed a 37.5% annual deduction. Class 11 -- light, self-propelled equipment 25% and Class III e.g. office furniture etc. 12.5% p.a.
(v) Withholding taxes (Not applicable to TIC Certificate holders)Withholding taxes are levied on several kinds of transactions
For Non certificate holders
Non-Residents (%)
Residents (%)
Interests
15
15
Dividends
20
15
Insurance Commission
7.5
7.5
Insurance Claim
30
30
Management/Professional Fees
30
N/A
Royalty Fees
30
N/A
Rent
40
15
Goods and Services
2
2
Transport
N/A
4
(vi) Capital gains taxThe Capital Gains Tax has been abolished. The Specified Building Tax, Training Levy, and Estate Duty have also been repealed.
(vii) Double Taxation treatiesDouble taxation treaties have been signed with Canada, Denmark, Finland, India, Italy, United Kingdom, Norway, Sweden, and Zambia. Tanzania is also in the process of negotiating treaties with several countries including Belgium, Burundi, Iran, Lebanon, Malaysia, Mauritius, Pakistan, Rwanda.
Sales and Excise Tax
Contact;Commissioner of Sales Tax DepartmentTanzania Revenue AuthorityLumumba and Sykes Streets (Kipata area)P.O. Box 1629Dar es Salaam
Telephone: 255 -22 - 182982 or 182898Fax: 255-22.37222
There are currently several types of transaction taxes in Tanzania, which can be primarily segmented into three categories: sales tax; stamp duty, and excise duty. Those taxes will be replaced by VAT after July 1998.
Registration ProcessAny business which is manufacturing or selling goods on which sales tax is payable must register with the Tanzania Revenue Authority by completing Form Sales Tax 01.This registration should be effected prior to commencement of operations. Tanzania Revenue Authority will physically inspect the site before issuing Sales Tax number.
Once operational, businesses are required to submit "Monthly Sales Return" -- along with a payment to the nearest TRA office not later than 15th day of the following month.
Sales taxes are applicable on both goods and services.
Registered Dealer Certificates (RDC)Manufacturing firms can apply for an exemption on sales tax after being registered under RDC scheme. In addition the RDC allows manufacturers to avoid double taxation.
Excise taxesExcise taxes are assessed on cigarettes, and a few other items that are considered luxuries. There are both ad valorem and specific rates depending on the product.
Summary of the Tax rate structures.
Import Duty
5%
10%
20%
30%
Sales Tax (goods)
5%
10%
20%
25%
Sales Tax (Services)
5%
10%
15%
20%
Excise Duty*
30%
* Excise duty is also levied on certain item at specified rates.
Factory inspection
Contact;Chief inspector of factoriesMinistry of Labour and Youth DevelopmentP.O. Box 9014Dar es Salaam.Telephone: 255-22-2180447 or 255-22-2111511
Under the Factories Ordinance of 1950, the Factories Inspectorate (Fl) is responsible for ensuring the safety and health of all employees.
Application process.There is a two-step application process for investors who are building their own factories. A "Notice of Building Operations or Works of Engineering Construction" must be submitted not later than seven days after the beginning of any construction. This form is available at no cost.
Once the factory is constructed and ready to begin operations, investors are required to complete form LDF 103. There is a small fee for the form. Upon receiving the application, the Factors Inspector will physically inspect the facility.
Business Guide
Business Registration
Trade Agencies
Tanzania Bureau of Standards
Weights and Measures
Industrial Court
Business Guide
This Guide is intended to present brief background information on Tanzania with emphasis on its economy, investment regime, incentives and to serve as a primary guide for prospective investors.
1. Business guide to Tanzania
General approval permits & licenses.
To set up business in Tanzania, General Approvals, permits and licenses are required. However, for investors who pass through Tanzania Investment Centre (TIC) facilitation of these requirements will be processed by the Centre.
Company registrationPrincipal forms of business organization are sole proprietor. partnership. joint venture. incorporated company and registered branch of overseas companies. All companies must be registered in Dar es Salaam.
a) Registrar of companies
Contact;Co-operative Buildings10th Floor,Lumumba StreetP.O. Box 9393,Dar es Salaam.
Telephone.: 255-55-180385, 180113, 180371, 188344
This is the first contact an investor makes in registering business in Tanzania.Private companies must have a minimum of two shareholders.
· Application processThe application process varies depending on the entity being registered
· Trade namesApply by letter to the Registrar.
· Private companiesPrepare Memorandum and Articles of Association once the trade name has been accepted. Lawyers are available to assist investors.
Several forms are required to be filled and submitted to the Registrar. These include application, list of directors, details of nominal shares, particulars of director or managers, notice of situation of office etc.
· Foreign branchProvide a certified copy of the company charter, Memorandum & Articles of Association from the Country of origin and information provided above.
· Trade/Service marks: Pay registration fees and place the advertisement in the Official Gazette.
· FeesCertificate of Compliance US$ 800, Certificate of Incorporation TShs. 240,000
Registration with Income Tax Department: - Tanzania Revenue Authority
Contact;CommissionerIncome Tax DepartmentTanzania Revenue AuthorityEast African Community BuildingP.O. Box 9131Dar es SalaamTel: 255-22-29533 or 38811
Once a business has been registered with the Registrar of Companies it is required to register with the nearest Tanzania Revenue Authority (TRA) office. Once registration formalities have been completed a file Number is established.
Information on taxation matters for all types of business enterprises
(i) Personal income taxesTanzania uses a progressive personal income tax for monthly income over TShs 30.000. Marginal tax rates peak at 35 percent assessed in monthly income. All employers are required to collect income tax for the Government from employees.
(ii) Housing levyA Housing levy of four percent of gross emoluments is collected by the TRA
(iii) Corporate income taxOnce a file number has been established, the business is expected to complete Provisional Tax Return form. The provisional tax return must be submitted within three months of the beginning of the starting accounting date; the provisional tax is payable quarterly.
A Final Tax Return form must be submitted 'within a period not exceeding nine months from the date of the final audited accounts of business’.
The corporate income tax rate is 35 percent for both resident and non-resident companies. (This is not the rate applicable to TIC certificate holders).
Exemptions from payment income tax can be requested by letter from the Commissioner of Income Tax.
(iv) Wear and tear deductionsThere are three rates of wear and tear deductions allowed depending on the type of equipment. Class 1-- tractors, combine harvesters, and heavy, self-propelled equipment -- is allowed a 37.5% annual deduction. Class 11 -- light, self-propelled equipment 25% and Class III e.g. office furniture etc. 12.5% p.a.
(v) Withholding taxes (Not applicable to TIC Certificate holders)Withholding taxes are levied on several kinds of transactions
For Non certificate holders
Non-Residents (%)
Residents (%)
Interests
15
15
Dividends
20
15
Insurance Commission
7.5
7.5
Insurance Claim
30
30
Management/Professional Fees
30
N/A
Royalty Fees
30
N/A
Rent
40
15
Goods and Services
2
2
Transport
N/A
4
(vi) Capital gains taxThe Capital Gains Tax has been abolished. The Specified Building Tax, Training Levy, and Estate Duty have also been repealed.
(vii) Double Taxation treatiesDouble taxation treaties have been signed with Canada, Denmark, Finland, India, Italy, United Kingdom, Norway, Sweden, and Zambia. Tanzania is also in the process of negotiating treaties with several countries including Belgium, Burundi, Iran, Lebanon, Malaysia, Mauritius, Pakistan, Rwanda.
Sales and Excise Tax
Contact;Commissioner of Sales Tax DepartmentTanzania Revenue AuthorityLumumba and Sykes Streets (Kipata area)P.O. Box 1629Dar es Salaam
Telephone: 255 -22 - 182982 or 182898Fax: 255-22.37222
There are currently several types of transaction taxes in Tanzania, which can be primarily segmented into three categories: sales tax; stamp duty, and excise duty. Those taxes will be replaced by VAT after July 1998.
Registration ProcessAny business which is manufacturing or selling goods on which sales tax is payable must register with the Tanzania Revenue Authority by completing Form Sales Tax 01.This registration should be effected prior to commencement of operations. Tanzania Revenue Authority will physically inspect the site before issuing Sales Tax number.
Once operational, businesses are required to submit "Monthly Sales Return" -- along with a payment to the nearest TRA office not later than 15th day of the following month.
Sales taxes are applicable on both goods and services.
Registered Dealer Certificates (RDC)Manufacturing firms can apply for an exemption on sales tax after being registered under RDC scheme. In addition the RDC allows manufacturers to avoid double taxation.
Excise taxesExcise taxes are assessed on cigarettes, and a few other items that are considered luxuries. There are both ad valorem and specific rates depending on the product.
Summary of the Tax rate structures.
Import Duty
5%
10%
20%
30%
Sales Tax (goods)
5%
10%
20%
25%
Sales Tax (Services)
5%
10%
15%
20%
Excise Duty*
30%
* Excise duty is also levied on certain item at specified rates.
Factory inspection
Contact;Chief inspector of factoriesMinistry of Labour and Youth DevelopmentP.O. Box 9014Dar es Salaam.Telephone: 255-22-2180447 or 255-22-2111511
Under the Factories Ordinance of 1950, the Factories Inspectorate (Fl) is responsible for ensuring the safety and health of all employees.
Application process.There is a two-step application process for investors who are building their own factories. A "Notice of Building Operations or Works of Engineering Construction" must be submitted not later than seven days after the beginning of any construction. This form is available at no cost.
Once the factory is constructed and ready to begin operations, investors are required to complete form LDF 103. There is a small fee for the form. Upon receiving the application, the Factors Inspector will physically inspect the facility.
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