Tax Invoice Tanzania: VAT Invoices, Credit Notes and Debit Notes on the Mainland
When must a business issue a VAT tax invoice in Tanzania? A VAT-registered supplier on the Mainland issues a tax invoice through its electronic fiscal system for each taxable supply. VAT falls due at the earliest of the invoice, the payment or the time of supply. Price changes, returns and cancellations need a credit or debit note within seven days, and the buyer has six months from the invoice to claim input tax.
A tax invoice in Tanzania is the document that turns a sale into VAT. It fixes when the supplier owes output tax, and it is the paper the buyer must hold before claiming input tax. Get it wrong and both sides pay: the supplier faces penalties, and the buyer loses the credit.
This guide covers the Mainland rules: who issues a tax invoice, when, what it must show, and how credit and debit notes work. It also covers foreign currency, imported services, the 16% rate and withholding agents, with a separate section on Zanzibar. The device rules are in our guides to EFD receipt rules and who needs an EFD machine.
What the law says
The Value Added Tax Act, Cap. 148 R.E. 2023 (the VAT Act) imposes VAT on taxable supplies made on the Mainland. We read the copy hosted by the Tax Revenue Appeals Board. Section 5 sets the standard rate at eighteen percent (register F0239).
In the R.E. 2023 arrangement, the tax invoice is section 90 and adjustment notes are section 91. The online copy we read stops in section 79, so we could not read those two sections. PwC's VAT in Africa overview for Tanzania (October 2026) summarises the section 90 particulars, and we rely on it for the checklist below.
We did read the sections that govern timing. Section 15 fixes when VAT becomes payable. Section 73 sets when the buyer may take input tax and the six-month cut-off. Sections 75 to 77 govern adjustments after a sale.
The Tax Administration Act, Cap. 438, adds the duty to issue fiscal receipts and invoices through an electronic fiscal device, with penalties behind it. The Ministry of Finance copy of Cap. 438 we could read is the R.E. 2019 text, so we cite it by its 2019 section numbers only.
Who is affected
Every VAT-registered person on the Mainland issues tax invoices. Registration is compulsory at taxable turnover of TZS 200 million in 12 months, or TZS 100 million in 6 months (register F0242). See our guide to TIN and VAT registration.
Buyers are affected as much as sellers. A registered buyer cannot take input tax without a valid tax invoice or fiscal receipt in hand when it files. Three groups need extra care: importers of services from abroad, suppliers to withholding agents, and businesses that still price in US dollars.
Unregistered traders must not charge VAT or present a document as a tax invoice. If they are inside the fiscal device regime, they still issue a fiscal receipt for each sale.
When does VAT fall due on an invoice?
Section 15 of the VAT Act makes VAT on a taxable supply payable at the earliest of three events: the supplier issues the invoice, the supplier receives all or part of the payment, or the time of supply occurs.
Section 2 defines the time of supply. For goods, it is when they are delivered or made available. For services, it is when they are rendered, provided or performed.
An invoice raised early therefore pulls VAT forward. A tax invoice issued in March for work delivered in April makes the VAT payable in March. A deposit received before any invoice does the same for the amount received. Use a pro forma invoice for approvals, because a pro forma is not a tax invoice.
The output tax goes in the return for the month it fell due, filed and paid by the 20th of the following month (register F0245). Long contracts with milestone billing should also be checked against sections 16 and 19 on progressive and periodic supplies.
What must a tax invoice show?
PwC summarises six section 90 particulars. The last two rows below are practice points we recommend, not items we read in the statute.
| Particular | What to check | Status |
|---|---|---|
| Date of issue | Matches the fiscal record; starts the six-month input tax window | Section 90 per PwC |
| Supplier's name | Registered name as on the VAT certificate | Section 90 per PwC |
| Supplier's TIN | The seller's TIN | Section 90 per PwC |
| Supplier's VRN | No VRN means no valid tax invoice | Section 90 per PwC |
| Description of the supply | Description, quantity and other relevant specifications | Section 90 per PwC |
| Consideration and VAT | Total consideration payable and the VAT included in it | Section 90 per PwC |
| Buyer's name, TIN and VRN | Supports a registered buyer's claim and TRA matching | Practice; confirm in regulations |
| Fiscal signature or code | Shows the document came through an EFD, VFD or EFDMS link | Fiscal receipt rules, Cap. 438 |
The buyer details matter in practice. TRA's 2021 amendment to the VAT (General) Regulations (GN 714 of 2021) already requires an EFD-generated tax invoice showing the customer's name, TIN and VRN for refunds on supplies to Zanzibar registered persons.
How must a tax invoice be issued?
A Mainland tax invoice is issued through the fiscal system, not typed in a word processor. Section 36(1) of the R.E. 2019 text of Cap. 438 required anyone who supplies goods or services, or receives payment for them, to issue a fiscal receipt or fiscal invoice using an electronic fiscal device. Persons the Commissioner General excludes issue manual receipts showing prescribed particulars, including the TIN.
TRA's EFD page explains that the Electronic Signature Device authenticates PC-produced documents, such as tax invoices, by printing a unique signature number on each. Larger businesses use a Virtual Fiscal Device (VFD) or link their invoicing system to TRA's Electronic Fiscal Device Management System (EFDMS). The 2025/26 budget proposed extending EFDMS e-invoice reporting to the remaining taxpayers.
The practical point: if your ERP prints the invoice, the ERP must be linked to the fiscal system. Otherwise the document is not a valid tax invoice for the buyer's claim.
Tax invoice, fiscal receipt, credit note or debit note: which one?
| Document | Issued by | When used | Effect on VAT |
|---|---|---|---|
| Tax invoice | VAT-registered supplier | Taxable supply, usually to a business buyer | Output tax for the supplier; supports the buyer's input tax |
| Fiscal receipt | Anyone in the fiscal device regime | Each sale or receipt of payment, typically to consumers | Records the sale; also supports input tax under s.73(3) |
| Credit note | Supplier | Price cut after sale, goods returned, supply cancelled | Supplier reduces output tax; registered buyer reverses input tax |
| Debit note | Supplier | Price increased after the invoice, extra charges on the same supply | Supplier increases output tax; registered buyer may take extra input tax |
A fiscal receipt and a tax invoice are not rivals. Section 73(3)(b) accepts "a valid tax invoice or fiscal receipt" for a domestic purchase. The difference is detail: a walk-in receipt may not name the buyer. PwC's tax summary (reviewed 9 September 2026) notes that a fiscal receipt also includes a receipt from the Government Electronic Payment Gateway or another approved system.
Is there a simplified invoice? In the Mainland text we read, we found no separate simplified-invoice regime. The fiscal receipt fills that role for consumer sales.
How do credit and debit notes work?
The VAT Act calls both documents "adjustment notes". Section 2 lists four "adjustment events" for an ordinary supply: cancellation, an alteration in the consideration, the return of goods, and a variation that changes whether the supply is taxable.
Where too little VAT was charged, section 75(1) requires the supplier to make an increasing adjustment and issue an adjustment note within seven days of becoming aware of the event. A taxable customer gets a matching decreasing adjustment, in effect extra input tax. This is a debit note.
Where too much VAT was charged, section 75(2) lets the supplier make a decreasing adjustment and requires the note within seven days. A taxable customer must make an increasing adjustment. Under section 75(3) its size follows the buyer's original credit: full, proportionate or nil. This is a credit note.
Section 76 adds conditions. The supplier's decrease is allowed only if it issued the note and kept a copy. If the customer is unregistered, the supplier must also have repaid the excess VAT in cash or by credit. The customer's decrease is allowed only if it holds a valid note when it files.
Section 77 fixes the period. An increasing adjustment goes in the period the person becomes aware of the event. A supplier's decrease goes in the period the note is issued. A customer's decrease goes in the period it becomes aware, or any one of the six following periods.
Section 26 deals with cancellations. If the supplier keeps part of the payment, the adjustment shrinks by the amount kept. A customer who never pays is a different case: that is bad debt relief under section 78, covered in our guide to VAT bad debt relief.
Worked example: a TZS 50,000,000 sale and a May return of goods
A Dar es Salaam distributor, registered for VAT, delivers equipment to a registered manufacturer on 16 March 2026 and issues a fiscal tax invoice that day. Neither is a withholding agent, and the buyer is fully taxable.
| Step | Supplier | Buyer |
|---|---|---|
| Invoice, 16 March: TZS 50,000,000 plus 18% VAT | Output VAT TZS 9,000,000 in the March return, due 20 April | Input VAT TZS 9,000,000 in the March return |
| Return of goods worth TZS 8,000,000, agreed 11 May | Credit note by 18 May: TZS 8,000,000 plus VAT TZS 1,440,000 | Receives the credit note |
| May return, due 20 June | Decreasing adjustment TZS 1,440,000 | Increasing adjustment TZS 1,440,000 |
| Net position | Output VAT TZS 7,560,000 on TZS 42,000,000 | Input VAT TZS 7,560,000 on TZS 42,000,000 |
18% of TZS 8,000,000 is TZS 1,440,000. The supplier's decrease falls in May because section 77(2)(a) ties it to the month the note is issued. The buyer's increase also falls in May, the month it learned of the return, under section 77(1).
What if the buyer has not yet claimed the March input tax? Section 73(1) allows the March period or any one of the six succeeding periods. Section 73(2) then bars any credit "after a period of six months from the date of tax invoice". For an invoice dated 16 March 2026, that is 16 September 2026.
The cautious reading is to include the claim in a return filed before that date, which makes the August return, filed early, the last safe one. The buyer should claim only the net TZS 7,560,000 once it holds the credit note. See our guide to input VAT claims.
How are foreign currency invoices converted?
Two rule sets meet here. The VAT Act taxes the value in shillings, and the 2025 foreign currency regulations control whether you may price in foreign currency at all.
The 2025 foreign currency rules
The Bank of Tanzania regulations on the use of foreign currency were published in Government Gazette No. 198 of 28 March 2025. The Bank of Tanzania public notice of 2 May 2025 says goods and services sold within Tanzania must be priced and paid for in shillings. Quoting prices in foreign currency, demanding or accepting payment in it, and refusing shillings are prohibited.
Clyde & Co reports that existing foreign currency contracts had 12 months to be amended, a window that ran to about 28 March 2026. It lists exceptions for diplomatic missions, international organisations, certain government payments, bank loans and duty-free shops. The Chanzo reported that the Prime Minister restated the shilling-only rule in Parliament in June 2026.
For a domestic tax invoice, price and invoice in shillings. Read the exceptions in the gazetted text before relying on them for anything else.
Worked example: a USD 20,000 service from abroad
A Dar es Salaam company engages a Nairobi consultant for USD 20,000. The consultant has no Tanzanian VAT registration, so no Tanzanian tax invoice exists. Assume an illustrative Bank of Tanzania rate of TZS 2,450 per US dollar on 10 March 2026, the invoice date. That rate is for illustration only, not a published BoT figure.
- Value: USD 20,000 at TZS 2,450 = TZS 49,000,000.
- VAT at 18%: TZS 8,820,000.
- March return: TZS 8,820,000 as output tax, and the same as input tax if the company is fully taxable.
Common practice is to convert at the Bank of Tanzania rate on the date VAT becomes payable. We did not find the conversion provision in the parts of the Act we read, so it is listed under Figures to confirm. File the BoT rate with the foreign invoice.
How is VAT on imported services handled without a supplier invoice?
The Act defines imported services as services supplied to a taxable person where the supply is not made in the United Republic. Section 4 makes the purchaser liable for the VAT. Section 72(2) says the purchaser accounts for it as both output and input tax, and allows no credit unless the output tax is declared in the same return.
This is the reverse charge. The buyer's evidence is the foreign invoice, the contract, proof of payment and the return entry. TRA's 2025 return form, in GN 352K of 2025, carries imported services as an output tax line. For a fully taxable buyer the entry nets to nil. A buyer with exempt supplies recovers only part, so the reverse charge becomes a real cost.
Withholding tax on the fee is a separate question; see our guide to withholding tax on payments.
How does the 16% rate show on an invoice?
The Finance Act 2025 added section 5(6) to the VAT Act. It applies 16% where a standard-rated supply on the Mainland goes to an unregistered person who pays through a bank or an approved electronic payment system (register F0240).
The rate is in the law but, on the evidence we found, not yet operating. The TRA public notice of 2 September 2025 says application depends on a further Commissioner General notice naming eligible persons and the method. PwC's summary, reviewed on 9 September 2026, still describes the rate as awaiting that notice. We found no later notice.
As at 14 November 2026, keep charging 18% on consumer sales until TRA publishes the notice. When it does, expect the 16% rate on its own line, the payment channel recorded, and proof of electronic payment kept for the return. Registered business buyers never get the 16% rate.
How do withholding VAT agents change the invoice?
The invoice to an appointed withholding agent still shows VAT at 18%. The agent withholds 3% on goods or 6% on services and remits it within 10 days after the tax period, so the supplier receives 15% or 12% (register F0233).
The VAT (General) (Amendment) Regulations, 2025, GN 352K prescribe a withholding certificate listing the invoices concerned. PwC reports that from 1 July 2026 the supplier needs that certificate to claim the withheld amount. See our guide to withholding VAT.
What are the penalties for invoice failures?
Fixed penalties are stated in currency points. One currency point is TZS 20,000 (register NEW-02-05).
| Failure | Penalty or fine | Source we read |
|---|---|---|
| Not using an EFD; not issuing a fiscal receipt or invoice on payment; issuing a false one; tampering with a device | 200 to 300 currency points (TZS 4,000,000 to 6,000,000), or up to three years' imprisonment, or both | TRA EFD offences page |
| Tax evaded through those offences | Fine of twice the tax evaded, or up to three years' imprisonment | TRA EFD offences page |
| Buyer failing to demand a receipt or report a refusal | 2 to 100 currency points (TZS 40,000 to 2,000,000) | TRA EFD offences page |
| Failing to maintain documents | Monthly: 1 currency point (individual), 10 (body corporate) | Cap. 438 R.E. 2019 s.77(2) |
| False or misleading statement, such as an inflated input claim | 50% of the shortfall; 75% if knowing or reckless (NEW-02-11) | Cap. 438 R.E. 2019 s.79(2) |
| Late VAT return or payment | Higher of 2.5% of unpaid tax or 15 currency points for a company, monthly (NEW-02-06) | Fee register |
| Input tax without a valid invoice or receipt | Credit disallowed | VAT Act s.73(3) |
Two cautions. TRA's penalties page states 100%, not 75%, for a knowing or reckless false statement, so treat the higher figure as a live risk. And the fiscal device fines come from the TRA EFD offences page, which gives no section numbers or date.
See also our guide to TRA penalties and interest. Prosecution, seizure of devices or records, and disputes that may reach the Tax Revenue Appeals Board belong with an advocate.
What about Zanzibar?
Zanzibar runs a separate VAT system under the Zanzibar Revenue Authority (ZRA). The Mainland VAT Act does not govern supplies made in Zanzibar.
The ZRA VAT page names the Value Added Tax Act No. 4 of 1998 (consolidated 2025) and the VAT Regulations 2012. It gives 15% for supplies in Zanzibar, with 18% for some financial, insurance, telecoms and digital services. Our register records 15% and a TZS 100 million threshold as F0246. The page links to ZRA's Virtual Fiscal Management System (VFMS) but sets out no receipt rules.
The Zanzibar VAT Regulations 2012, as amended, are detailed on invoices:
- Regulation 6: the words "tax invoice" on the face, the seller's name, address, TIN and VAT number, date and time of supply, customer details, unit prices, rate and totals.
- Regulation 8: a credit note for a cancelled supply, returned goods or reduced value, stating the reason.
- Regulation 10: credit notes within twelve months of the invoice, serially numbered; a debit note or further invoice for an extra charge.
We could not verify how VFMS invoices are validated, so ask ZRA before relying on a Zanzibar invoice for a Mainland claim.
What to do now
- Map every invoicing channel. Confirm each system that prints a sales document runs through an EFD, VFD or EFDMS link.
- Fix the template. Check every tax invoice carries the section 90 particulars plus the buyer's TIN and VRN.
- Stop early invoices. Use pro forma invoices for approvals, because a tax invoice makes VAT payable at once.
- Set a seven-day note rule. Issue credit and debit notes within seven days of learning of a return, discount, price change or cancellation.
- Diary the six-month window. Track each purchase invoice date and claim well before six months run out.
- Invoice in shillings. Price local sales in TZS, and file the BoT rate used for each foreign invoice.
- Book imported services. Declare output and input tax on foreign services in the same return.
- Watch for the 16% notice. Keep charging 18% to consumers until TRA publishes it.
Key dates and deadlines
- Earliest of invoice, payment or supply: VAT falls due (s.15).
- Within seven days: credit or debit note after an adjustment event (s.75).
- 20th of the following month: VAT return and payment (F0245).
- Within 10 days after the period: withholding agent remits withheld VAT (F0233).
- Six months from the invoice date: last point for the buyer's input tax credit (s.73(2)).
- 28 March 2025: foreign currency regulations published; 12 months to amend existing contracts.
- 2 September 2025: TRA notice that the 16% rate awaits a further notice.
- Twelve months (Zanzibar): limit for a credit note after the invoice.
How Zatra helps
Zatra reviews invoice templates and fiscal set-ups, builds credit and debit note procedures, and reconciles input tax against the six-month window. We file VAT returns through our tax and regulatory compliance service, and our bookkeeping team keeps the records TRA asks for.
Government charges, such as penalties or tax assessed by TRA or ZRA, are paid at the official rate to the authority against its GePG control number. They stay separate from Zatra's professional fee, quoted in writing before work starts. Our government fees guide lists the official figures.
Audits and objections run through our TRA audit and dispute service. Prosecutions, seizures, appeals and legal opinions go to an advocate, and Zatra has one on the team. Zatra prepares and files; it does not decide or guarantee any authority's outcome.
Sources and status
Accurate as at 14 November 2026.
- Value Added Tax Act, Cap. 148 R.E. 2023. Tax Revenue Appeals Board, R.E. 2023 copy. Accessed 14 Nov 2026.
- Tax Administration Act, Cap. 438 R.E. 2019. Ministry of Finance, 2019. Accessed 14 Nov 2026.
- EFD offences. Tanzania Revenue Authority, undated. Accessed 14 Nov 2026.
- Interest, penalties and offences. Tanzania Revenue Authority, 2026. Accessed 14 Nov 2026.
- Effective application of VAT reduced rate of 16%. Tanzania Revenue Authority, 2 September 2025. Accessed 14 Nov 2026.
- VAT (General) (Amendment) Regulations, 2025, GN 352K. Tanzania Revenue Authority, 30 June 2025. Accessed 14 Nov 2026.
- Prohibition on the use of foreign currency for local transactions. Bank of Tanzania, 2 May 2025. Accessed 14 Nov 2026.
- VAT Regulations 2012, as amended. Zanzibar Revenue Authority, 2012 as amended to 2020. Accessed 14 Nov 2026.
- VAT in Africa: Tanzania overview. PwC, October 2026. Accessed 14 Nov 2026.
- Tanzania: corporate, other taxes. PwC, reviewed 9 September 2026. Accessed 14 Nov 2026.
- Tanzania's new regulations on foreign currency usage. Clyde & Co, 31 March 2025. Accessed 14 Nov 2026.
Figures to confirm before you act
- The text of VAT Act sections 90 and 91 (R.E. 2023), read here only as summarised by PwC.
- The VAT rule and rate source for converting foreign currency consideration to shillings.
- Whether the six months in section 73(2) runs to the return's filing date or the period end.
- The R.E. 2023 section numbers and text of the Cap. 438 provisions cited by their 2019 numbers, and the record-keeping period.
- The false statement penalty for knowing conduct: 75% (2019 text, NEW-02-11) or 100% (TRA page).
- Any Commissioner General notice bringing the 16% rate (F0240) into operation after 9 September 2026.
- The EFDMS e-invoicing start dates, and the exceptions in the gazetted foreign currency regulations.
- How ZRA's VFMS validates invoices, and any Zanzibar rules newer than the 2012 Regulations.
This article is general information based on official sources available at the date of publication. It is not legal, tax or financial advice. Laws and notices change. Verify with the issuing authority or consult Zatra before acting.
Frequently asked questions
Can an unregistered business issue a tax invoice in Tanzania?
No. Only a VAT-registered person charges VAT and issues a tax invoice. An unregistered trader in the fiscal device regime issues a fiscal receipt with no VAT. Check a new supplier's VRN on TRA's records before paying a large first invoice.
Is an Excel invoice valid for input tax?
Not on the Mainland, for a supplier inside the fiscal device regime. Section 73(3) requires a valid tax invoice or fiscal receipt issued under the Act. A document printed outside the fiscal system carries no fiscal signature, so TRA can refuse the credit even where the purchase was real.
Can we cancel a wrong invoice and reissue it?
Not by deleting it. Once an invoice has gone through the fiscal system, correct it with a credit note against the original, then issue a new invoice. That keeps the fiscal record, the supplier's return and the buyer's claim in line.
Does a settlement discount need a credit note?
Yes, if it is given after the invoice. A change in the consideration is an adjustment event, so the supplier issues a credit note within seven days. A discount shown on the original invoice needs no note, because VAT is charged on the reduced price from the start.
What if the supplier refuses to issue a credit note?
Without the note, the supplier cannot take its decrease. The buyer still reverses its input tax once it knows of the event. Ask in writing and keep the correspondence. A refusal to issue a fiscal document can be reported to TRA, and contract claims go to an advocate.
Must a foreign supplier register to issue Tanzanian tax invoices?
Not for services to a registered Tanzanian business, where the buyer accounts for VAT under the imported services rules. PwC reports that non-residents registered for digital services to consumers are exempt from fiscal devices, and recommends their invoices still carry the core particulars.
How long should invoices and credit notes be kept?
Work to at least five years and confirm the current Tax Administration Act text. Keep them longer while an objection, appeal or VAT deferment is open. GN 448Y of 2023 sets ten years for records on deferred VAT capital goods.
Sources & regulators
Verify before filing: Rates, forms and thresholds move by Finance Act, Government Notice and portal revision. Confirm the live schedule on the mandate-holder portal before you budget or submit. Law-firm alerts and Big Four notes are discovery only.
- Value Added Tax Act, Cap. 148 R.E. 2023: Tax Revenue Appeals Board, R.E. 2023 copy. Accessed 2026-11-14.
- Tax Administration Act, Cap. 438 R.E. 2019: Ministry of Finance, 2019. Accessed 2026-11-14.
- Effective application of VAT reduced rate of 16%: Tanzania Revenue Authority, 2 September 2025. Accessed 2026-11-14.
- VAT (General) (Amendment) Regulations, 2025, GN 352K: Tanzania Revenue Authority, 30 June 2025. Accessed 2026-11-14.
- EFD offences: Tanzania Revenue Authority, web page accessed 2026. Accessed 2026-11-14.
- Prohibition on the use of foreign currency for local transactions: Bank of Tanzania, 2 May 2025. Accessed 2026-11-14.
- VAT Regulations 2012, as amended: Zanzibar Revenue Authority, 2012 as amended to 2020. Accessed 2026-11-14.
- VAT in Africa: Tanzania overview: PwC, October 2026. Accessed 2026-11-14.
- Tanzania's new regulations on foreign currency usage: Clyde & Co, 31 March 2025. Accessed 2026-11-14.
Disclaimer
This article is informational orientation. It is not legal, tax or investment advice and not a government decision. Tanzanian instruments move by Act, Government Notice, Finance Act and portal revision. If a sentence here disagrees with the live mandate-holder, the mandate-holder wins. Zatra Consultants Limited does not issue licences, permits, tax clearances or approvals, and gives no assurance of any regulatory or banking outcome. Professional fees are published only on /pricing/.