Living There

March 19, 2018

INDIVIDUAL TAXATION

Resident individuals are taxed on their worldwide source of income. Married couples are taxed separately.

An individual is considered as a resident of Tanzania if he has established a permanent home in Tanzania and was present in Tanzania for the particular tax year. In cases where no permanent home was established, the individual is considered a resident if he was present in Tanzania in that taxable year, or was present in Tanzania in that tax year and in each year before that tax year, with an average stay of 122 days for each of the preceding 2 years.

INCOME TAX

Income is classified into the following categories: (1) business income, (2) employment income, and (3) investment income. Income of residents exceeding the threshold amount is taxed at a flat rate of 30%.

INCOME TAX 2017 - 2018 in Tanzania Mainland

TAXABLE INCOME, TZS (US$) TAX RATE
Up to 170,000 (US$75) 0%
170,000 - 360,000 (US$159) 9% on band over US$75
360,000 - 540,000 (US$239) 20% on band over US$159
540,000 - 720,000 (US$319) 25% on band over US$239
Over 720,000 (US$319) 30% on all income over US$319
Source: Global Property Guide

INCOME TAX 2017 - 2018 in Zanzibar

TAXABLE INCOME, TZS (US$) TAX RATE
Up to 180,000 (US$80) 0%
180,000 - 360,000 (US$159) 9% on band over US$80
360,000 - 540,000 (US$239) 20% on band over US$159
540,000 - 720,000 (US$319) 25% on band over US$239
Over 720,000 (US$319) 30% on all income over US$319
Source: Global Property Guide

Residents are entitled to some deductions such as medical expenses and health insurance premiums.

RENTAL INCOME

Rental income earned by residents from leasing out real properties is taxed at a final withholding rate of 10%.

Rental income from residential houses is taxed only if the gross rent exceeds TZS500,000 (US$221).

RENTAL INCOME TAX

TAXABLE INCOME, TZS (US$) MARGINAL TAX RATE
Up to 500,000 (US$221) 0
Over 500,000 (US$221) 10% on all income over US$221
Source: Global Property Guide


Stamp Duty on Lease of Property

Lease agreements are liable to stamp duty, which is levied at 1% of the gross rent.

CAPITAL GAINS TAX

Capital gains tax earned by residents is taxed at a flat rate of 10% and is levied on the net gains realized. Acquisition costs and expenses incurred in the selling of property are deducted from the gross selling price.

However, if the property was used as the individual's private residence for three years prior to the sale, capital gains are exempt up to TZS15 million (US$6,637).

Stamp Duty on Sale of Property

Conveyance of real properties is liable to stamp duty, which is levied at 1% of the gross selling price.

PROPERTY TAX

Property Tax

Property tax is levied at flat rates on the property value by the municipal or city councils. Applicable rates vary depending on the size, use and location of the property.

For Dar es Salaam region, property tax is levied at 0.15% on residential properties and 0.20% on commercial properties.

CORPORATE TAXATION

INCOME TAX

Income and capital gains earned by companies are generally taxed at a flat rate of 30%. Income-generating expenses are deductible when calculating for taxable income.

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