One Group, Two Registrars: Running Mainland and Zanzibar Together

This page is the two-sided group operating file: which entity the islands need, which identity TRA keeps, and what an intra-group invoice costs. It is not an island prospectus and not a payroll manual.

• Choosing the side first: two registrars, two tax files
• What each entity may hold: land rights by jurisdiction
• A hospitality group: tourism setup compared
• Advising across the water: two files, not one desk

As at 15 September 2026. BRELA and BPRA hold the legal person, TRA and ZRA the tax files; this page rests on Cap. 212, the Income Tax Act, Cap. 332, and the 1977 Constitution.

Two registries, and the restriction that comes first

The United Republic is one state with two company registers. BRELA incorporates Mainland companies under Cap. 212 and holds their beneficial-ownership particulars; BPRA does the same for the islands. Neither searches the other’s index, so a certificate from one buys nothing at the other’s counter. The First Schedule to the Constitution of the United Republic of Tanzania, 1977 makes income tax, corporation tax, customs and excise Union matters; company registration, licensing, consumption tax, land and employment are absent from it.

Restriction precedes process. A non-citizen owns land in neither jurisdiction: Mainland land is public land vested in the President under the Land Act, Cap. 113, reached by a foreign-owned company as a derivative right through the Tanzania Investment Centre, while the Land Tenure Act No. 12 of 1992 vests island land in the President of Zanzibar, reached as a lease through the Zanzibar Investment Promotion Authority. The reserved-activity list at GN No. 487A of 2025 closes certain Mainland trades to non-citizens and binds nothing on Unguja or Pemba. Settle both questions before the group chart is drawn.

Three shapes a two-sided group can take

A branch opens faster but holds nothing a buyer can purchase. Where an exit is imagined, incorporate.

One TIN, two revenue authorities, no consolidated return

TRA issues the Taxpayer Identification Number under the Tax Administration Act, Cap. 438, and charges corporate income tax at 30% of chargeable income under Cap. 332 wherever in the United Republic the profit arose. Provisional tax falls due on the last day of the third, sixth, ninth and twelfth months of each accounting period, per company: three entities means twelve instalment dates.

ZRA collects the islands’ own taxes through ZIDRAS: Zanzibar value added tax at 15% above island turnover of TZS 100 million, hotel and restaurant levies, infrastructure tax on bed-nights. Its Mainland counterpart is the Value Added Tax Act, Cap. 148, at 18% above TZS 200 million. Nor is there group relief: each resident company is taxed on its own chargeable income, so a loss in the island hotel leaves the Mainland trading company’s bill untouched.

Intra-group charges are priced, withheld and levied

Section 33 of Cap. 332 requires transactions between associates to be priced as unrelated parties would, and the Income Tax (Transfer Pricing) Regulations, 2018 require the supporting file to exist when the return is lodged, not when an examiner asks. A management charge with no agreement, no cost base and no benefit test is disallowed on the payer while the recipient stays taxed on it.

Withholding follows the payment type. A service fee between residents is deducted at 5%; to a non-resident it carries 15%. Dividends between resident corporations are withheld at 5% where the recipient holds at least 25% of shares and votes, and at 10% otherwise. Interest carries 10%. Tax deducted is remitted within seven days after the month of payment.

Then the levy. Under the Local Government Finance Act, Cap. 290, each Mainland local authority charges 0.3% of the turnover of every establishment in its area. A fee invoiced from Dar es Salaam is Mainland turnover and attracts it; nothing equivalent follows on Unguja. For a service supplied across the channel, get both authorities’ written treatment before the first invoice.

One immigration desk, two labour desks, two funds

Residence is Union work: the Immigration Act, Cap. 54, covers the whole United Republic, so a permit is not reissued at the quay. Employment is not. A Mainland contract sits under the Employment and Labour Relations Act, Cap. 366, with the work permit granted by the Labour Commissioner under the Non-Citizens (Employment Regulation) Act, 2015; an island contract sits under Zanzibar’s employment statute, approved by its own labour office. Each permit names one employer, so a seconded manager stays Mainland staff unless the island entity employs and pays them.

The funds diverge further. Mainland payroll carries a pension contribution of 20% of gross emoluments to the National Social Security Fund, at least half borne by the employer; a Workers Compensation Fund contribution of 0.5% of gross monthly emoluments for private-sector employers under the Workers Compensation Act, Cap. 263; and a skills and development levy of 3.5% where the employer has ten or more employees, under the Vocational Education and Training Act, Cap. 82. Island staff join the Zanzibar Social Security Fund instead, and neither Mainland charge follows them. PAYE stays Union.

The order the desks actually take it

1. Test the activity against what is reserved: that answer fixes the shareholding available before any name is filed.
2. Fix the shape in a board resolution: naming which entity holds each licence, lease and bank mandate.
3. Incorporate or register on each side: BRELA through the Online Registration System; BPRA on its own forms, with the parent’s constitution certified for a branch.
4. Declare beneficial ownership at each registry: the same natural persons, twice, because one register does not populate the other.
5. Take the TIN, then open the island tax file: ZRA opens a ZIDRAS record only once BPRA has issued its certificate.
6. Collect the licences: a Mainland trade licence under the Business Licensing Act, Cap. 208, and the island licence from whichever desk owns the activity.
7. Open payroll on each side: pension, workers’ compensation and skills-levy registrations for Mainland staff, the island fund for island staff.
8. Sign the intra-group agreements before the first invoice: services, licence and loan terms at arm’s length, the pricing file built as the year runs.

Papers each registry asks for

An island subsidiary needs the memorandum and articles, particulars of directors and the secretary, a registered island address with evidence of the premises, certified passports or National Identification Authority cards for every subscriber and director, the Mainland parent’s shareholders’ resolution authorising the subscription, and beneficial-ownership particulars.

A branch file differs: the charter as registered at home, the list of directors, the name and local address of a resident representative authorised to accept service, and the address of the principal place of business. Each tax desk then wants that side’s registry certificate, the trade licence, a lease or title, a bank letter and directors’ identity documents.

Illustrative arithmetic, not a quotation: what the second file costs

A Mainland trading company turns over TZS 4,000,000,000 and pays service levy of TZS 12,000,000 to the council where its establishment sits. Its island sister, a hotel, turns over TZS 1,200,000,000 and pays no such levy. The Mainland company invoices the hotel TZS 260,000,000 in management fees: the hotel deducts 5% and remits TZS 13,000,000 to TRA, and the fee adds TZS 780,000 to the invoicing company’s levy bill.

Mainland payroll of eighteen staff on gross emoluments of TZS 360,000,000 carries a skills levy of TZS 12,600,000, a workers’ compensation contribution of TZS 1,800,000 and an employer pension share of TZS 36,000,000. The hotel’s twenty-four island staff, on TZS 300,000,000, attract neither of the first two lines.

The hotel’s chargeable profit of TZS 280,000,000 bears income tax of TZS 84,000,000, settled as four provisional instalments of TZS 21,000,000. Should the trading company run a loss the same year, that liability stands in full.

Where two-sided groups stall

• An island contract signed by the Mainland company before any BPRA registration exists, leaving the counterparty attached to no local person.
• One invoice template carrying the Mainland tax number for island sales; the customer is refused its credit and stops paying.
• Turnover added across the group to argue that one consumption-tax registration covers both sides, then back-dated to the month the island threshold was crossed.
• Management fees billed monthly with no agreement and no evidence of benefit, disallowed while the recipient stays taxed.
• Staff moved across the water on a Mainland work permit, found at an island inspection with no local approval on file.

What has moved since 2022

The Tanzania Investment Act, 2022 replaced the 1997 statute on the Mainland; the Centre still measures a certificate of incentives against minimum investment capital of USD 500,000 for a foreign-owned project and USD 50,000 for a locally-owned one. The islands run their own 2018 promotion statute, with a separate threshold and lease route, so a group may qualify on one side only.

On administration, the Zanzibar Revenue Board became the Zanzibar Revenue Authority under the islands’ 2022 Act and moved filing on to ZIDRAS. The Finance Act 2023 lifted the Mainland consumption-tax registration threshold and cut the skills levy rate.

Desks this file does not replace

BRELA owns the Mainland register, its ownership record and the annual return; BPRA owns the island equivalents. TRA owns income tax, customs and excise for the whole group; ZRA owns the islands’ non-Union taxes and audits that ledger on its own cycle. Expect two examination teams in one year, each testing whether the split between them is real.

Each investment authority owns its own certificate and does not recognise the other’s. Lands offices own the tenure instrument; labour offices own the permits; Immigration owns residence. An audit opinion belongs to a firm registered with the National Board of Accountants and Auditors. Zatra prepares the applications, sequences the desks and reconciles both ledgers; it does not practise law, sign an audit opinion or issue an approval.

What to confirm before you act

• Which entity on each side holds the licence, the lease and the bank mandate, resolved before anything is lodged.
• Whether your activity is reserved or conditioned in either jurisdiction, and what shareholding that leaves a non-citizen.
• Current thresholds and rates on the TRA and ZRA portals on the day you apply, not the day you planned.
• Both authorities’ written treatment of your cross-channel services, in hand before billing starts.
• A transfer-pricing file for every intra-group charge, dated within the year it covers.
• Which payroll carries each person, which fund receives the contribution, which office issued each permit.