Zanzibar VAT B2C digital services

15% on non-resident electronic services

The East African semi-autonomous jurisdiction of Tanzania Zanzibar has imposed its 15% VAT on non-resident providers of digital services to consumers. This was introduced in the August Zanzibar Finance Act (FA) 2024. This confirms earlier regulations from 2022.

 It is joining over 120 countries with VAT on digital services.

This applies to B2C transactions. For B2B, the reverse charge should be used, meaning non-resident do not need to charge VAT and may avoid registration is no B2C sales. There is no VAT registration threshold for electronic services.

The regime is separate from the Tanzanian VAT on digital services regime, requiring separate VAT registration is appropriate.

Which services liable to Zanzibar VAT?

The following services provided through the internet or similar electronic means are included within the scope of VAT:

• Software
• Website hosting
• E-learning (where no human intervention)

Providers may use any of the following pieces of evidence to determine if the VAT is due in Zanzibar:

• Payment details, including bank or credit card;
• IP address; or
• Other similar information

There is no requirement to issue invoices.

The VAT obligations fall onto resident marketplaces in the case where they facilitate sales for non-resident providers of digital services.

Africa & Middle East VAT on digital services