VAT ON IMMOVABLE

PROPERTIES
OVERVIEW OF VAT • VAT is consumption tax charged on taxable
goods, services or immovable property of any
economic activity whenever value is added at
each stage of production and at the final stage
of sale
• VAT is charged on both locally produced goods
and services and on imports
• Value Added Tax is charged by persons
registered for VAT only
• Generally, the rates are 18% for standard
rated supplies, and 0% for exports of goods
and services

4/17/2023 2
VAT POINTS
▪ A supply of immovable property situated in Mainland Tanzania or a supply of
Supplies relating to services directly related to land situated in Mainland Tanzania shall be treated as a
immovable property supply made in Mainland Tanzania.
▪ VAT chargeable at 18%

▪ A supply of service directly related to immovable property shall be treated as a

supply made in Mainland Tanzania if
Supply of services o the land to which the property relates is not situated in Mainland Tanzania;
related to immovable o the supplier is- (i) a resident of Mainland Tanzania; or (ii) a non-resident who
property carries on an economic activity at or through a fixed place in Mainland
Tanzania.
▪ VAT is applicable at the rate of 18%

4/17/2023 3
VAT EXEMPTIONS
Reference Items Exempted from VAT
▪ Sale of vacant land.

▪ Lease, license, hire or other form of supply, to the extent that it is a supply of the
right to occupy and reside in residential premises.

▪ Sale of immovable property, to the extent that the property relates to residential
First Schedule of
premises, not including:
VAT Act, 2014
o The first sale of newly constructed residential premises; or

o A subsequent sale if the premises have been occupied as a residence for less
than two (2) years.

4/17/2023 4
SALE AS A GOING CONCERN
Reference VAT implication

▪ An economic activity shall be sold as a going concern where-

o everything necessary for the continued operation of the economic activity is
supplied to the person to whom the economic activity is sold; and
o the purchaser makes the acquisition in the course of or for the purposes of, an
economic activity it carries on after the sale.
▪ Where a taxable person makes supplies in Mainland Tanzania as a part of a transaction
Section 20 of the for the sale of an economic activity as a going concern by that taxable person to another
VAT Act, 2014 taxable person-
o the supplies shall be treated as a single supply that is made in Mainland Tanzania;
and
o the single supply shall be treated as if it were not a supply.

▪ When a real estate business is fully disposed, the supply is considered as a single supply
and no VAT will be charged

4/17/2023 5

Audit and Assurance
▪ Statutory audits
▪ Internal audits
▪ Forensic audit and risk
assessment
▪ Assurance engagements
▪ Drafting Standard Operating
Policies (SOPs)
▪ Fixed Assets Register
preparation
▪ Fraud audits and inspection
▪ IFRS reporting
▪ Management and operational
audits
▪ Business control services
▪ Corporate reporting
Certified Public Accountants
OUR SERVICES
Tax and Advisory
▪ Tax Audits
▪ Transfer Pricing
▪ Transactions based advisory
▪ Transfer of shares and securities
▪ VAT refund applications
▪ Post clearance Customs Audit
▪ Account Reconciliations with
Tanzania Revenue Authority
▪ Tax applications on Mergers and
acquisitions
▪ Due Diligence reports
▪ Tax training
▪ Tax Health checks
▪ International Tax Services
Dar-es-Salaam office A Proud Member of
Mezzanine Floor, Urban Rose,
Jamhuri Street, Kisutu
P. O. Box 75303
Tel: +255 786 443 003
Finance and Accounts Secretarial Compliance
▪ Cloud accounting and accounts ▪ Incorporation of company
compilation ▪ Change in company particulars
▪ Reconciliation of statutory ▪ Corporate Advisory
compliances such as sales, ▪ Human Resource Management
imports, purchase, payrolls, bank ▪ BRELA compliance
and VAT control ▪ Mortgages and charges
▪ Ledger scrutiny, Variance and ▪ Employee Litigation
ratio analysis ▪ Registration with TBS TMDA
▪ MIS reporting ▪ Processing permit applications
▪ Business Plans ▪ Merger and Acquisitions & FCC
▪ Financial Projections and Cash compliance
Flow Forecast ▪ Loan registration with BOT
▪ Valuation of business ▪ Business License
▪ Financial reporting ▪ Trademark and Patent rights
▪ Payroll processing ▪ Winding up of business
Email: info@mehtaassociates.co.tz
Website: www.mehtassociates.co.tz
Available on:
 Kalpesh Mehta Gaurav Bothra Francisca Assenga Snehal Shinde
Managing Partner Audit Manager Tax Manager Manager
T: +255 715 925 592 T: +255 684 134 678 T: +255 784 961 244 T: +255 682 538 773
E: kalpesh@mehtaassociates.co.tz E: audit@mehtaassociates.co.tz E: tax@mehtaassociates.co.tz E: manager@rmfcl.co.tz

Located at:
Jamhuri / Asia Street, Mezzanine Floor, Urban Rose Tower, Dar Es Salaam,
Tanzania
Phone numbers: + 255 22 2110471, +255 786 443 003 | Website:
mehtaassociates.co.tz

Disclaimer:
Any opinions or estimates contained in this publication represent our
understanding at this time and are subject to change without notice. While
all reasonable care has been taken in the preparation of this highlight, we
accept no responsibility for any errors it may contain or for any omissions or
otherwise or for any loss, howsoever caused or sustained, by the person who
relies on it.