Transfer pricing in Tanzania at a glance
|Regulation Type||National regulations based on OECD|
|Are there specific transfer pricing regulations?||Yes|
|Submission deadline upon request||30 days|
|Annual update required||N/A|
|Official language requirements||English|
|Potential impact of penalties||N/A|
Tanzanian tax law
Rules for transfer pricing in Tanzania are based upon:
- Income Tax Act 2004, Section 33
- Income Tax (Transfer Pricing) Regulations 2014
Tanzania is not an OECD member but their transfer pricing regulations are generally in line with the OECD Transfer Pricing Guidelines.
Accepted methods are:
- the comparable uncontrolled price method
- the resale price method
- the cost plus method
- the profit split method
- the transactional net margin method
Priority of methods
Tanzanian transfer pricing regulations do not prescribe any priority of methods. However, since their rules are in line with the OECD Guidelines it is expected that taxpayers should use the most appropriate method, as prescribed by the OECD.
Information that should be included in the documentation:
- Organisational structure
- Group financial report
- Nature of the business, industry, and market conditions
- Controlled transactions
- Pricing policies
- Assumptions, strategies and information regarding factors that influenced the setting of pricing policies
- Comparability, functional and risk analysis
- Selection of transfer pricing method
- Application of the transfer pricing methods
- A list of advance pricing arrangements entered into by members of the group with respect to transactions to which the taxpayer is a party
- Available documents and information that were used in preparing the transfer pricing documentation as they are necessary to support the transfer pricing analysis
Rules for transfer pricing in Tanzania prescribe that documentation should be submitted in English.
Requirements to prepare documentation annually
Submission deadline upon request by tax authorities
Upon request of the tax authorities, a taxpayer has 30 days to submit its documentation.
Advance Pricing Agreements
The new rules for transfer pricing in Tanzania provide for the option to obtain an Advance Pricing Agreement (APA).
The term for which an APA can be agreed upon in Tanzania remains unclear.
In Tanzania there are no specific transfer pricing penalties in place, meaning that ordinary penalties apply.