Tanzania Investment Income Tax Guide 2026

Overview — Investment Income Taxation

Tanzania taxes investment income primarily through withholding tax (WHT) at source. The withholding tax is a final tax for most non-residents. Resident individuals may have the option to aggregate investment income with other income and claim credit for WHT deducted. The TRA administers all withholding tax obligations, and payers of investment income are responsible for deducting and remitting WHT.

Dividend Taxation

Dividends paid by Tanzanian companies are subject to withholding tax as follows:

• Resident individuals — 5% (final tax if amount is below TZS 2 million per year; otherwise, the individual may elect aggregation with other income)
• Resident companies — exempt from WHT on dividends received from other Tanzanian companies (subject to participation exemption)
• Non-residents — 10% (subject to DTT reduction; may be reduced to 5–10% under most treaties)

Dividends paid by a company listed on the Dar es Salaam Stock Exchange (DSE) may qualify for reduced rates under capital market incentives.

Interest Taxation

Interest income is subject to withholding tax at the following rates:

• Resident individuals and companies — 10%
• Non-residents — 10% (subject to DTT reduction)
• Government securities — 10% (interest on Treasury bills and bonds)
• Bank deposits — 10% (interest on savings and fixed deposit accounts)
• Exempt interest — interest earned by registered pension funds, charitable organisations, and certain agricultural credit schemes

Interest WHT is a final tax for non-residents. Residents may elect to include interest income in their annual return if the WHT deducted exceeds their marginal rate.

Capital Gains on Shares

Capital gains on the disposal of shares in Tanzanian companies are taxed as follows:

• Residents — 10% on net capital gains
• Non-residents — 20% on net capital gains
• Listed shares (DSE) — 10% for both residents and non-residents (broker usually withholds at source)
• Principal exemption — gains on disposal of shares in a company that holds the seller's principal residence may be exempt

Royalties and Other Investment Income

Royalties and other investment income are subject to withholding tax at 15% for residents. Non-residents receiving royalties from Tanzanian sources are subject to WHT at 15%, which may be reduced under applicable DTTs. Management fees paid to non-residents are subject to WHT at 15%, and service fees at 10%.

Double Tax Treaties (DTTs)

Tanzania has over 12 double tax treaties in force, including with India, the United Kingdom, South Africa, Kenya, Uganda, Zambia, and others. These treaties typically reduce withholding tax rates on dividends, interest, and royalties. Claiming treaty benefits requires filing a residency certificate (Form R1) with the payer before the reduced rate is applied. Most treaties follow the OECD Model Tax Convention.

FAQs

Is dividend income taxable if the company is not listed?

Yes, dividends from both listed and unlisted Tanzanian companies are subject to WHT at the applicable rates.

Can I claim a foreign tax credit for WHT paid on overseas investments?

Yes, Tanzanian residents who pay foreign WHT on investment income may claim a foreign tax credit against their Tanzanian tax liability, subject to the provisions of the relevant DTT or TRA guidelines.

Are DSE-listed company dividends taxed differently?

DSE-listed companies may qualify for reduced WHT rates as a capital market incentive. Check with your broker or the Capital Markets and Securities Authority (CMSA) for current rates.

What is the penalty for non-withholding of WHT?

The payer is liable for the un-withheld WHT plus a penalty of 100% of the tax due and interest at 1% per month.

Disclaimer

This guide provides general information about Tanzanian investment income taxation for the 2026 tax year. Tax laws, rates, and regulations may change. Always consult with a qualified Tanzanian tax advisor or the Tanzania Revenue Authority for advice specific to your situation. InvestmentKit does not provide tax advice.