# Tanzania transfer pricing v0.1

> **General reference only.** This skill is general tax/accounting reference material for AI-assisted workflows. It has not been reviewed for any specific person's facts, documents, elections, deadlines, residency, filing status, or local procedures. Do not rely on it to file, pay, amend, or take a tax position without review by a qualified professional in the relevant jurisdiction.

## Who this applies to

Any arrangement between associates must be priced as if at arm's length (ITA s.33(1)). The Regulations apply to a controlled transaction where one party is located in and taxed in Tanzania and the other is in or outside Tanzania ([reg 2(2)](https://www.tra.go.tz/images/uploads/regulations/TAX_ADMINISTRATION_%28TRANSFER_PRICING%29_REGULATION%2C_2018.pdf)), so domestic associates are covered. "Associate" is defined in ITA s.3. A branch and its head office are deemed separate persons and associates ([reg 8](https://www.tra.go.tz/images/uploads/regulations/TAX_ADMINISTRATION_%28TRANSFER_PRICING%29_REGULATION%2C_2018.pdf)). OECD and UN guidance applies, but the Regulations prevail on any inconsistency ([reg 9](https://www.tra.go.tz/images/uploads/regulations/TAX_ADMINISTRATION_%28TRANSFER_PRICING%29_REGULATION%2C_2018.pdf)).

## Rates, bands and thresholds

| Item | Figure | Condition | Tax year | Source |
|---|---|---|---|---|
| File documentation with the return | Total transactions with associates of TZS 10,000,000,000 or more | For that year of income | 2026 | [reg 7(3)(a)](https://www.tra.go.tz/images/uploads/regulations/TAX_ADMINISTRATION_%28TRANSFER_PRICING%29_REGULATION%2C_2018.pdf) |
| Below the threshold | Prepare before the return date; produce within 30 days of request | All other persons with controlled transactions | 2026 | [reg 7(3)(b)](https://www.tra.go.tz/images/uploads/regulations/TAX_ADMINISTRATION_%28TRANSFER_PRICING%29_REGULATION%2C_2018.pdf) |
| Documentation penalty | Not less than 3,500 currency points (TZS 52,500,000) | Breach of reg 7 | 2026 | [reg 7(4)](https://www.tra.go.tz/images/uploads/regulations/TAX_ADMINISTRATION_%28TRANSFER_PRICING%29_REGULATION%2C_2018.pdf); [TAA First Sch](https://www.tra.go.tz/images/uploads/acts/Tax_Administration_Act.pdf) |
| Pricing penalty | Greater of 30% of the adjustment or 100% of the tax shortfall | Controlled transaction not at arm's length, from 1 July 2026 | 2026 | [FA 2026 s.77](https://www.tra.go.tz/images/uploads/acts/THE_FINANCE_ACT%2C_2026.pdf) |
| Five or more comparables | Between the 35th percentile and the point the gazette prints as "sixty of percentile" | More than four data points. The upper figure is ambiguous in the printed text: unverified, see Sources | 2026 | [reg 6(6)](https://www.tra.go.tz/images/uploads/regulations/TAX_ADMINISTRATION_%28TRANSFER_PRICING%29_REGULATION%2C_2018.pdf) |
| Four or fewer comparables | Average of the data | | 2026 | [reg 6(6)](https://www.tra.go.tz/images/uploads/regulations/TAX_ADMINISTRATION_%28TRANSFER_PRICING%29_REGULATION%2C_2018.pdf) |
| Result outside the range | Adjusted to the median | | 2026 | [reg 6(7)](https://www.tra.go.tz/images/uploads/regulations/TAX_ADMINISTRATION_%28TRANSFER_PRICING%29_REGULATION%2C_2018.pdf) |
| APA term | Up to five years of income | | 2026 | [reg 13(9)](https://www.tra.go.tz/images/uploads/regulations/TAX_ADMINISTRATION_%28TRANSFER_PRICING%29_REGULATION%2C_2018.pdf) |

Regulation 4(6) still sets a penalty of 100% of the adjusted amount. The Finance Act 2026 changed the Act, and the Act outranks regulations, so use s.90(2)(c) as amended.

## The base

1. List every transaction with associates, including branch dealings, and total them for the TZS 10 billion test.
2. Choose the method. Use a traditional method first (comparable uncontrolled price, resale price, cost plus); use a transactional profit method (profit split, net margin) only where these cannot be reliably applied; another method needs the Commissioner's satisfaction ([reg 5](https://www.tra.go.tz/images/uploads/regulations/TAX_ADMINISTRATION_%28TRANSFER_PRICING%29_REGULATION%2C_2018.pdf)). Pick the most appropriate method for the transaction (reg 5(5)).
3. Compare on property or service, functions, assets and risks, contract terms, economic circumstances and business strategy ([reg 6(1)](https://www.tra.go.tz/images/uploads/regulations/TAX_ADMINISTRATION_%28TRANSFER_PRICING%29_REGULATION%2C_2018.pdf)). Foreign comparables are allowed where domestic data cannot be obtained (reg 6).
4. A tested party abroad is accepted only with all its relevant information (reg 5(7)).
5. **Intra-group services:** show that the service was rendered, gave real benefit, and the charge is justified. Shareholder, duplicative, incidental and on-call services are disregarded ([reg 10](https://www.tra.go.tz/images/uploads/regulations/TAX_ADMINISTRATION_%28TRANSFER_PRICING%29_REGULATION%2C_2018.pdf)).
6. **Financing:** the party giving or receiving group financing, with or without consideration, sets an arm's length interest rate (reg 10).
7. **Intangibles:** see reg 11. A locally developed intangible moved abroad must be paid for on transfer, and no royalty is then allowed when licensed back.
8. **Commodities:** comparable uncontrolled price, with the quoted spot price as a reference; on exports, a higher agreed price stands ([reg 12](https://www.tra.go.tz/images/uploads/regulations/TAX_ADMINISTRATION_%28TRANSFER_PRICING%29_REGULATION%2C_2018.pdf)).

The file must hold the items in [reg 7(2)](https://www.tra.go.tz/images/uploads/regulations/TAX_ADMINISTRATION_%28TRANSFER_PRICING%29_REGULATION%2C_2018.pdf): group structure, business and market, the controlled transactions with values, pricing policies, computations, functions, assets and risks, comparability analysis, method, tested party, financial indicator, supporting documents and an index.

## Deadlines and filing

1. Prepare the file while the transaction is developed or carried out: the Regulations call for contemporaneous documentation ([regs 3, 7(1)](https://www.tra.go.tz/images/uploads/regulations/TAX_ADMINISTRATION_%28TRANSFER_PRICING%29_REGULATION%2C_2018.pdf)).
2. At TZS 10 billion or more, file it with the income tax return, six months after year end ([ITA s.117(1)](https://www.tra.go.tz/images/uploads/acts/The_Income_Tax_Act.pdf)).
3. Below that, hold it by the return date and hand it over within 30 days of request.
4. An APA request sets out the transactions, scope, duration, proposed method and any other country involved ([reg 13(2)](https://www.tra.go.tz/images/uploads/regulations/TAX_ADMINISTRATION_%28TRANSFER_PRICING%29_REGULATION%2C_2018.pdf)). The holder files a compliance report with each return (reg 13(13)).
5. If a treaty partner adjusts, ask the Commissioner for a corresponding adjustment ([reg 14](https://www.tra.go.tz/images/uploads/regulations/TAX_ADMINISTRATION_%28TRANSFER_PRICING%29_REGULATION%2C_2018.pdf)).

Not yet confirmed: any separate TP disclosure form or box in the return, and any country-by-country reporting rule in Tanzania. We found neither on TRA's pages, so do not state one. TRA's [Transfer Pricing Guidelines](https://www.tra.go.tz/images/uploads/regulations/Transfer_Pricing_Guideline.pdf) predate the 2018 Regulations; where they differ, the Regulations win.

## Penalties and interest

The two pricing figures compare the adjustment with the shortfall, so a loss-making company still pays on the adjustment. The penalty rises by 10% on repeat application and falls by 10% on voluntary disclosure before discovery or the next audit ([TAA s.90(3)](https://www.tra.go.tz/images/uploads/acts/Tax_Administration_Act.pdf)). Interest runs at the statutory rate, compounded monthly ([TAA s.87](https://www.tra.go.tz/images/uploads/acts/Tax_Administration_Act.pdf)).

## Cross-border points

The Commissioner may re-characterise income and allocate expenditure, including head-office costs under ITA s.92(2) ([s.33(2)](https://www.tra.go.tz/images/uploads/acts/The_Income_Tax_Act.pdf)). Interest also meets the 7 to 3 limit in [Corporate income tax](tz-corporate-income-tax.md). Withholding on the same payment sits in [Cross-border](tz-cross-border.md).

## Two worked examples that recompute

**Example 1: taxpaying company.** TRA adjusts a service fee by TZS 400,000,000. The company pays 30%, so the shortfall is TZS 120,000,000. Both limbs give TZS 120,000,000.

```oa-check
name: TP penalty, full taxpayer
inputs:
  adjustment: 400000000
  rate: 0.30
steps:
  - shortfall: adjustment * rate
  - penalty: max(adjustment * 0.30, shortfall)
expected:
  shortfall: 120000000
  penalty: 120000000
```

**Example 2: file now, or wait for the request?** A company has TZS 12,000,000,000 of associate transactions, so it must file with the return. Losses absorb most of a TZS 400,000,000 adjustment, leaving a shortfall of TZS 45,000,000. The penalty is still TZS 120,000,000, which is why a loss-making group should not treat TP as a low risk. If the file is also missing, the reg 7(4) minimum adds at least TZS 52,500,000.

```oa-check
name: TP penalty, loss company with missing file
inputs:
  adjustment: 400000000
  shortfall: 45000000
  points: 3500
steps:
  - penalty: max(adjustment * 0.30, shortfall)
  - doc_min: points * 15000
  - total: penalty + doc_min
expected:
  penalty: 120000000
  total: 172500000
```

## Ask the client first

1. Who are the associates, and in which countries?
2. What is the total value of associate transactions for the year?
3. Which transaction types: goods, services, royalties, loans, guarantees?
4. Is there a branch, a Tanzanian-developed intangible, or commodity sales?
5. Does a file exist, dated when, and which method does it use?
6. Is the company in tax loss?

## Sources

All read on 2026-11-01. The Regulations are a scanned gazette copy read page by page. Reg 6(6) reads "between thirty fifth percentile and sixty of percentile", and the upper figure needs confirming against the gazette original or TRA. Regulation 3's definition of "arm's length price" is cut off in the same copy.

| Source | Link | Read |
|---|---|---|
| Tax Administration (Transfer Pricing) Regulations 2018, GN 166 | https://www.tra.go.tz/images/uploads/regulations/TAX_ADMINISTRATION_%28TRANSFER_PRICING%29_REGULATION%2C_2018.pdf | 2026-11-01, page |
| Income Tax Act Cap. 332 R.E. 2023 | https://www.tra.go.tz/images/uploads/acts/The_Income_Tax_Act.pdf | 2026-11-01, ss.3, 6, 11, 12, 19, 33, 56, 86, 89, 92, 93, 98, 105 to 117, First Sch |
| Tax Administration Act Cap. 438 R.E. 2023 | https://www.tra.go.tz/images/uploads/acts/Tax_Administration_Act.pdf | 2026-11-01, ss.86 to 90, First Sch |
| Finance Act 2026, No. 2, s.77 | https://www.tra.go.tz/images/uploads/acts/THE_FINANCE_ACT%2C_2026.pdf | 2026-11-01, Parts IX, XXI, XXVI |
| TRA Transfer Pricing Guidelines | https://www.tra.go.tz/images/uploads/regulations/Transfer_Pricing_Guideline.pdf | 2026-11-01, whole guideline headings |

Not yet confirmed: upper percentile in reg 6(6); any TP disclosure box in the return; any country-by-country reporting rule.