Global minimum tax rate - a Tanzanian perspective

What you need to know:

Although these rules are expected to be implemented in 2023/2024, new (and some existing) investors are already asking questions regarding the implication of Pillar Two for their operations and the implication of the top up tax.

Many companies in Tanzania will be subsidiaries of group companies that are based in a jurisdiction that is a member of the Inclusive Framework and which has agreed to implement the two pillar approach; in fact, most jurisdictions targeted for investments in Tanzania (such as the US, France, Egypt, Oman) are part of the Inclusive Framework. If the parent company is in a country which is a member of the Inclusive Framework, then a top up tax (known as income inclusion rule) will be levied by the tax authority of the parent company to bring the effective tax rate for its subsidiary to 15%. As Tanzania is not a member of the Inclusive Framework, it will not be able to use the tax treaty based rule which permits the source jurisdiction to make some adjustments and therefore any top up tax will be “enjoyed” / collected by the tax authority of the parent company tax jurisdiction.

Tanzania brings forward school closing date over El Niño rain concerns

Global minimum tax rate - a Tanzanian perspective

What you need to know:

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