Frequently asked questions about Tanzania VAT
What is VAT?
VAT is the abbreviation of Value Added Tax. VAT is in general due when goods and/or services are sold. It applies to most goods and services supplied for use or consumption in Tanzania. VAT is a consumption tax because it is ultimately borne by the final consumer.
Who must pay VAT?
Generally, VAT is invoiced by the supplier that is selling taxable goods or services and collected from the customer. Subsequently, the supplier declares the VAT collected on sales and remits the VAT to the tax authorities.
Zoom is registered for VAT in Tanzania as a non-resident supplier of electronically supplied services. As such, Zoom is required to collect VAT on supplies to customers that are not registered for VAT in Tanzania and remit the VAT to the tax authorities in Tanzania.
If you are VAT registered in Tanzania, you should provide your VAT registration number to Zoom (see ‘How do I enter my VAT registration number?’ below for details on how to do this). If the VAT registration number is valid, then no Tanzanian VAT will be charged on the supplies made to you by Zoom. If you do not provide a valid Tanzanian VAT registration number to Zoom, then Tanzanian VAT will be charged on the supplies made to you by Zoom.
Why am I being charged VAT?
Video conferencing and telecommunication services supplied by Zoom fall within the Tanzanian VAT rules relating to electronically supplied services provided by non-resident suppliers. Zoom is therefore required to charge Tanzanian VAT on such supplies at the standard rate of VAT provided the supplies are made to non-VAT registered customers in Tanzania.
What is a VAT registration number?
A VAT registration number is a unique number assigned by the tax authorities to businesses that are registered for VAT in Tanzania. A VAT registration number in Mainland Tanzania should follow the format: “99-999999-A”.
How do I enter my VAT registration number?
To provide your VAT, follow the steps below depending on where your billing portal is located in the left navigation menu of the Zoom web portal. Not sure how to identify where your billing portal is located? Learn how to locate your billing settings.
You are required to notify us if there is a change to your VAT registration status.
- Sign in to the Zoom web portal.
- In the navigation menu, click Plans and Billing then Billing Management.
- In the Contact Information section, click Edit.
- If selected, clear the Not VAT Registered check box.
- Enter your VRN.
- Click Save.
- Sign in to the Zoom web portal.
- In the navigation menu, click Account Management then Billing.
- Click the Billing Information tab.
- To the right of Sold To Contact, click Edit.
- If selected, clear the Not VAT Registered check box.
- Enter your VRN.
- Click Save Changes.
Does Zoom have a VAT registration number?
Yes, Zoom is registered for VAT in Tanzania as a non-resident supplier of electronically supplied services and Zoom’s VAT registration number will be shown on the invoice it issues to you.
How is Zoom determining which customers VAT applies to?
If a customer's ‘Sold To’ location is in Tanzania, and the customer has not provided a valid VAT registration number, Zoom will charge Tanzanian VAT on its invoices issued to you.
Are there any special exemptions or zero-rating applicable for charities or other business organizations under which VAT may not be charged?
Zoom is required to charge VAT on supplies to customers in Tanzania that are not registered for VAT. However, certain customers may be exempt from being charged Tanzanian VAT under Section 6(2) of the VAT Act, 2014 on receipt of a completed and approved ITX281.01.E exemption form. If this applies to you, submit a request to Zoom Support to update your tax status with Zoom.
Are there any VAT obligations for me as a customer?
If you have provided a valid Tanzanian VAT registration number to Zoom, no Tanzanian VAT will be charged on the supplies made to you. However, you may be required to self-assess the Tanzanian VAT due under the “reverse charge” mechanism.
There is no VAT reporting obligation for a customer who is not registered for VAT in Tanzania. However, Zoom will charge VAT on its supplies to you.
Is Zoom required to issue electronic or fiscalized tax invoices?
As per the applicable regulations (Value Added Tax - Registration of Non-Resident Electronic Service Suppliers - GN NO 478Q), non-resident suppliers of electronically supplied services are exempt from issuing fiscalized invoices.
What if I have a VAT registration number and forget to enter it?
The VAT registration number can be entered at any time. If entered before the next invoice, Zoom will not charge Tanzanian VAT on the next invoice or future invoices issued to you. If no VAT registration number is entered at the time the next invoice is issued, Tanzanian VAT will be charged until a valid VAT registration number is entered. No retrospective adjustments will be made to invoices where you did not provide a valid Tanzanian VAT registration number to Zoom.
Decision tree – My “Sold To” address is Tanzania; will I be charged VAT?
Disclaimer
Every customer is unique and so are their specific tax circumstances. The above-stated information should not be considered as tax advice, but as a general overview of relevant VAT rules in Tanzania. Zoom cannot provide you with tax advice for your individual situation, and therefore we strongly recommend speaking with a professional tax advisor for tailored advice.