Tanzania Corporate Tax - Guide for International Expansion

Expanding your business to Tanzania? Understanding the corporate tax landscape is crucial for making informed decisions about your East African operations. Tanzania offers significant opportunities for international businesses, with its strategic location, growing economy, and business-friendly reforms.

Whether you're considering setting up operations in Dar es Salaam or exploring investment opportunities across this diverse nation, getting to grips with corporate tax obligations will help ensure compliance and optimize your financial planning. Wise Business can help streamline your international payments and currency management as you navigate Tanzania's business environment.

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This publication is provided for general information purposes and does not constitute legal, tax, or other professional advice from Wise Payments Limited, its subsidiaries or affiliates, and it is not intended as a substitute for obtaining business advice from a tax advisor or any other professional.

Tanzania Corporate tax rate in 2025

The standard corporate income tax rate in Tanzania is 30% for resident companies. This rate applies to companies incorporated in Tanzania or those with their place of effective management in the country. The rate has remained stable in recent years, providing predictability for businesses planning their operations.¹

Non-resident companies are taxed on income with a source in Tanzania, with a corporate income tax rate of 30% on the income of a permanent establishment (PE) in Tanzania. Certain payments to non-residents, however, are subject to non-resident withholding tax (WHT) rates.

However, Tanzania offers preferential rates for certain sectors and activities. Manufacturing companies may qualify for a reduced rate of 25% under specific conditions, while companies operating in Export Processing Zones (EPZs) can benefit from a 10% corporate tax rate after an initial tax holiday period.¹

Companies listed on the Dar es Salaam Stock Exchange may qualify for reduced rates depending on the percentage of shares offered to the public.¹

How to pay corporate tax in Tanzania

Corporate tax in Tanzania is administered by the Tanzania Revenue Authority (TRA), which provides an efficient online platform for filings. The TRA's regulations are designed to promote transparency and accountability among taxpayers.² All registered companies must use this electronic platform for tax compliance, making the process more efficient and transparent.

Companies are required to file their corporate income tax returns within six months after the end of their accounting year. For example, if your company's financial year ends on 31 December, the return must be filed by 30 June of the following year. Instalment tax (provisional tax) is payable in four equal instalments, due not later than three months, six months, nine months, and 12 months from the beginning of the accounting period. Provisional tax payments are due by the last day of the sixth month of the tax year.³

The penalty for late filing is the higher of 2.5% of the unpaid tax per month of delay, OR TZS 300,000 (15 currency points). Furthermore, interest on late payments is charged at the statutory rate (compounded monthly, as published by the TRA/Bank of Tanzania). The TRA also imposes additional penalties for non-compliance, including potential prosecution for serious cases of tax evasion.³

Let's calculate the annual tax liability for a company with TZS 1.5 billion turnover (approximately £500,000). Assuming a profit margin of 15%, the taxable profit would be TZS 225 million. At Tanzania's standard corporate tax rate of 30%, the annual tax due would be:

TZS 225,000,000 × 30% = TZS 67,500,000 (approximately £22,500)

When expanding your business to Tanzania, the right financial tools will make the process smoother. Using a platform like Wise Business makes it easy to manage international finances. A multi-currency account allows businesses to pay for incorporation costs, registration fees, and government taxes in local currency without paying high exchange rate fees.

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Tax Compliance in Tanzania

The tips to keep your company fully compliant with Tanzanian tax regulations:

• Register with the Tanzania Revenue Authority (TRA): Businesses must register for all applicable taxes, including Income Tax, VAT, Excise Duty, Customs Duty, and Corporate Tax. Registering early ensures you can legally operate and avoid unnecessary penalties.
• Understand the tax year and deadlines: The Tanzanian tax year runs from July 1 to June 30. VAT returns are due monthly by the 20th, while provisional tax payments are due by the last day of the sixth month. Income tax returns must be filed by the end of the tax year.⁴
• File accurate tax returns: Submit estimated tax returns within three months of the accounting period and final returns within six months of year-end (or nine months for public sector entities). WHT returns are due monthly by the 7th. Late filing attracts penalties of either TZS 300,000 or 2.5% of unpaid tax, whichever is higher, plus interest at the Bank of Tanzania discount rate³.
• Submit annual returns: Companies must file an annual return with the Companies Registry every year, either on the anniversary of incorporation or within 12 months of the previous filing. This return discloses details about directors, shareholders, and governance⁵.
• Maintain proper records: Keep clear and updated financial documentation, including invoices, receipts, and bank statements. Using software for corporate tax returns can simplify compliance and minimize filing errors.
• Prepare for audits: The TRA conducts random and risk-based audits to verify filings. If selected, cooperate fully, present documentation promptly, and be aware of your right to fair treatment and appeals.
• Avoid unnecessary risks: While some businesses consider operating in countries with zero corporate tax, staying compliant in Tanzania protects your business from fines, preserves your operating license, and builds credibility with regulators.

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International Expansion to Tanzania

Tanzania’s strategic location in East Africa appeals to international business investors. The country serves as a gateway to a regional market of more than 400 million consumers, offering businesses access to Tanzania’s 65 million people and neighboring economies through the East African Community (EAC). Not only this, its 1,424 kilometers of coastline, excellent weather, fertile soil, and abundant water sources make it suitable for agriculture, agro-processing, and livestock farming.⁶

The government has prioritized reforms to improve business ease, simplifying company registration and streamlining tax compliance. Understanding the Tanzania corporate tax rate is a crucial first step, as companies need to align their corporate tax strategy with local regulations. Investors also benefit from sector-specific incentives, particularly in agriculture, energy, and tourism, which continue to attract significant foreign direct investment.

Moreover, Tanzania is a rapidly growing emerging market. It ranks among the 20 fastest-growing economies globally. Over the past decade, GDP growth has averaged around 7%, and both the IMF and World Bank project this momentum will continue.⁷ The country’s trade partnerships with China, Canada, and Japan, covering thousands of goods, further highlight its potential.⁸

Its appeal is enhanced by its strong legal framework and growing infrastructure investments in ports, roads, and digital networks. Entrepreneurs can access the corporate tax helpline and other regulatory resources for assistance.

When comparing personal tax vs corporate tax in Tanzania, companies may find the latter more favorable for structuring long-term operations. By leveraging a clear tax compliance plan and integrating into Tanzania’s expanding market, businesses can position themselves for growth.

The roadmap for setting up operations in Tanzania goes as follows:⁹

1. Conduct market research to assess demand and opportunities.
2. Build a tailored business plan to fit the Tanzanian market.
3. Choose the right legal structure for your company.
4. Register with the Business Registration and Licensing Agency (BRELA).
5. Set up your tax registration to pay corporate tax.
6. Establish record-keeping and reporting systems for smooth compliance.

Expanding into Tanzania gives businesses both a foothold in Africa and a pathway to wider global markets. After knowing all therules of operations internationally, and in Tanzania particularly, you can expect good growth and target achievement.

Incorporation of Business in Tanzania

To incorporate a business in Tanzania, you must register through the Business Registration and Licensing Agency (BRELA). BRELA’s Online Registration System (ORS) simplifies applications and post-registration tasks, ensuring smoother compliance and easier investor access.¹⁰

The key requirements for registration are:

• Consolidated Form: Generated online after entering all company details; must be signed by all directors and the company secretary.
• Certificate of Incorporation: A certified copy proving the company’s legal existence.
• Constitutional Documents: Certified copies of the Memorandum and Articles of Association, statutes, or any governing charter outlining internal governance, shareholder rights, and business objectives.
• Recent Accounts: The latest financial statements or audited reports, demonstrating the company’s financial standing.
• Form No. 434: Required for foreign companies; includes (1) Registered office address abroad and in Tanzania, (2) List of directors, (3) Names of local representatives in Tanzania, (4) A declaration attested by a Commissioner for Oaths/Notary Public
• Integrity Pledge Form: A signed declaration confirming the company’s commitment to anti-corruption laws, good governance, and lawful conduct in Tanzania.
• Corporate Tax Compliance: After incorporation, businesses must follow Tanzania’s corporate tax policy. Corporate tax compliance software, or the best corporate tax software, can help manage filings, reduce errors, and ensure timely payments.

Business Entities in Tanzania

Under the Companies Act, 2002, several entity types are available:^{11 12}

• Sole Proprietorship: Simple and fully controlled by one individual. Best suited for small-scale operations.
• Partnership: Can be general (all partners share responsibilities and liabilities) or limited (includes both general and limited partners).
• Limited Liability Company (LLC): Offers liability protection for members and is widely used for commercial businesses.
• Public Limited Company (PLC): Can list shares publicly and is appropriate for larger enterprises seeking outside investment.
• Branch Office: A foreign company can establish a presence without creating a separate legal entity.

Each structure has different regulatory and tax obligations, so businesses are encouraged to align their choice with long-term goals and consider technology solutions to simplify corporate governance and tax reporting.

International corporate tax best practices

Managing corporate tax obligations across multiple jurisdictions requires a strategic approach that balances compliance with efficiency. International businesses operating in Tanzania should establish robust systems for tracking income, expenses, and tax obligations in local currency while maintaining consolidated reporting in their home currency.

Staying compliant with both Tanzanian and international tax regulations is paramount. This includes understanding transfer pricing rules, which Tanzania has strengthened in recent years following OECD guidelines. Companies should maintain detailed documentation of intercompany transactions and ensure arm's length pricing to avoid disputes with tax authorities.

Tanzania has double taxation agreements (DTAs) with several countries, including the UK, India, South Africa, and several European nations. These treaties can significantly reduce withholding taxes on dividends, royalties, and interest payments, making it crucial for international businesses to understand and leverage these agreements properly.

Maintaining transparent and accurate financial records is essential for smooth tax compliance in Tanzania. The TRA requires companies to keep books of accounts for at least five years, and these must be readily available for inspection. Digital record-keeping systems that can handle multiple currencies and provide audit trails are particularly valuable for international operations.

Take the complexity out of international expansion with Wise Business

Researching corporate tax is a crucial step when expanding your business into a new country. The next step is setting up the financial infrastructure to handle the complexities of operating across borders, from managing multi-currency cash flow to mitigating FX risk.

The Wise Business account provides the financial tools to make your international expansion to Tanzania efficient and simple. It's the one account for managing your money globally.

With a Wise Business account*, you can:

• Pay suppliers and initial fees: Pay suppliers, global payroll, and one-off incorporation costs in the local currency.

• Manage your money across borders: Hold and exchange 40+ currencies in one account, always with the mid-market exchange rate and low, transparent fees.

• Streamline your accounting: Integrate with tools like Xero or QuickBooks to simplify tracking your company's international finances.

• Empower your team: Provide multi-user access for your finance team and issue expense cards for international spending.

Wise is designed to support every step of your journey, from paying your first registration fee to receiving international payments and managing your global treasury.

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FAQs - Corporate tax in Tanzania

Who is liable for corporate tax in Tanzania?

All companies incorporated in Tanzania are liable for corporate income tax on their worldwide income. Non-resident companies are taxed only on income sourced from Tanzania, including business profits, rental income, and capital gains from Tanzanian assets. The determination of tax residency depends on either the place of incorporation or the location of effective management.

Are there any tax incentives for businesses in Tanzania?

Yes, Tanzania offers various tax incentives to promote investment and economic development. These include reduced rates for manufacturing companies (25%), Export Processing Zone benefits (10% rate after tax holidays), and incentives for companies investing in priority sectors such as agriculture, tourism, and infrastructure. Special Economic Zones also provide additional benefits, including duty-free imports of machinery and raw materials.

What is the tax treatment of dividends in Tanzania?

Dividends paid by Tanzanian companies to residents are generally exempt from tax at the recipient level, following the classical system of corporate taxation. However, dividends paid to non-residents are subject to withholding tax at a rate of 15% (in some specific cases, the rate is 10% or 5%, such as for DSE-listed companies or as reduced by applicable double taxation agreements). Companies must withhold and remit this tax to TRA within seven days of payment.

What is the process for registering for corporate tax in Tanzania?

Companies must register for corporate income tax with TRA within 30 days of commencing business operations. The registration process involves submitting incorporation documents, business registration certificates, and completing TRA forms through the iTax system. Once registered, companies receive a Tax Identification Number (TIN) which must be used for all tax-related transactions.

What are the common pitfalls to avoid regarding corporate tax in Tanzania?

Common mistakes include failing to register for tax on time, inadequate record-keeping, missing quarterly instalment payments, and incorrect currency conversion calculations. Many international companies also overlook transfer pricing documentation requirements or fail to claim available double taxation treaty benefits. Engaging local tax advisors and maintaining robust compliance systems can help avoid these costly errors.

Sources used in this article:

1. PwC Tax Summaries: Tanzania Taxes on Corporate Income
2. Tanzania Revenue Authority (TRA): Taxpayer Portal
3. PwC Tax Summaries: Tanzania Tax Administration
4. Auditax International: TRA Compliance and Tax Filing Deadlines
5. TanBizLink: Filing of Annual Returns
6. TanBizLink: Why Invest in Tanzania
7. Tanzania Investment Centre (TIC): Economic Stability
8. TIC: Access to Markets
9. Multiplier: Tanzania Company Registration
10. TIC: Company Registration Procedures
11. Lawgratis: Business Law in Tanzania
12. The Exchange: Business Structure in Tanzania

Sources last checked 10/12/2025