VAT on International Transport for Goods in Transit

The VAT Act 2014, charges VAT at the rate of zero to the supply of services involving international transport of goods. Therefore, the transportation of goods to/from outside the United Republic of Tanzania is zero rated.


However, this does not apply to ancillary services rendered on transit goods.

The Act defines ancillary services to mean stevedoring, lashing and securing, cargo inspection, preparation of customs documentation, container handling and storage of transported goods or goods to be transported. VAT on these ancillary services is applicable at the current rate of 18%.

Transportation of transit goods, in some cases involves sub-contracting of transport services from one taxable person to another taxable person (both resident in the United Republic of Tanzania) and therefore, VAT charged from one taxable person to another taxable person is ultimately charged to the foreign customer thus affecting the total cost of the services.

TRA provided an interpretation that the supply of international transport services has been zero rated regardless who is a supplier subject to conditions/evidence which must be fulfilled/obtained in order for the transporter of transit goods to zero rate the service when performing it even if sub-contracting takes place. These are:

  • The transporter must be in possession of road consignment note of the respective goods;
  • Copies of customs documents in relation to the goods in transit (Bill of lading, transit travel document etc.);
  • Truck Movement sheet;
  • Exit note from country of destination; and,
  • Copy of the invoice from the transporter (service provider) to the foreign customer.

Once the transporter is in possession of the above mentioned documents, the service shall be zero rated regardless of the address of service provider.

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