Synopsis of Tanzania’s new transfer pricing regulations

What you need to know:

Tanzania issued new transfer pricing regulations in 2018 which I understand introduce more rules and requirements that were not incorporated in the earlier regulations. In view of our subsidiary’s planned presence in Tanzania, could you please provide an overview of the key changes introduced by the 2018 regulations? Best regards, Chloe.

In this sense, if indirect methods of allocation are in situations where services cannot be directly attributed to a specific entity, it will be challenging to convince the TRA with regard to supporting documentation for benefits received from intragroup services. The 2018 regulations require the determination of the arm’s length interest rate for intragroup financing regardless of whether there is consideration for such financing. According the 2018 regulations, the owner of a locally developed intangible that is transferred outside Tanzania should be compensated appropriately at the time of the transfer. That intangible cannot attract a royalty when licensed back for use in Tanzania. This measure is in accord with the base erosion on profit shifting (BEPS) actions on intangible assets.

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Synopsis of Tanzania’s new transfer pricing regulations

What you need to know:

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