Tanzania
Income Tax Act
Chapter 332
- Commenced on 1 July 2004
- [This is the version of this document at 30 November 2019.]
- [Note: This legislation has been thoroughly revised and consolidated under the supervision of the Attorney General's Office, in compliance with the Laws Revision Act No. 7 of 1994, the Revised Laws and Annual Revision Act (Chapter 356 (R.L.)), and the Interpretation of Laws and General Clauses Act No. 30 of 1972. This version is up-to-date as at 31st July 2002.]
Part I – Preliminary provisions
1. Short title
This Act may be cited as the Income Tax Act.2. Application
This Act shall apply to Tanzania Mainland as well as Tanzania Zanzibar.3. Interpretation
In this Act, unless the context requires otherwise—"adjusted assessment" means an assessment adjusted in accordance with section 48 of the Tax Administration Act;"amount derived" means a payment received by a person or that the person is entitled to receive;"an entity of a public character" means an entity established and functions solely for a public purpose and which operates in such a way that:(a)its membership is open to the general public or an identifiable group of a community with common interests;(b)it operates for purposes other than deriving profit or gain;(c)it does not allow any distribution or deemed distribution of profit generated out of its charitable business; and(d)its profit is ploughed back and used solely for improving or expansion of the original charitable purpose or function;"approved retirement fund" means a resident retirement fund having a ruling under section 11 of the Tax administration Act;"arrangement" includes an action, agreement, course of conduct, dealing, promise, transaction, understanding or undertaking, whether express or implied, whether or not enforceable by legal proceedings and whether unilateral or involving more than one person;"assessment" means an assessment made in terms of sections 94 of this Act or sections 46, 47, 48 or 81 of the Tax Administration Act;[Cap. 438]"asset" means a tangible or intangible asset and includes currency, goodwill, know-how, property, a right to income or future income and a part of an asset;"associate" in relation to a person, means another person where the relationship between the two is—(a)that of an individual and a relative of the individual, unless the Commissioner is satisfied that it is not reasonable to expect that either individual will act in accordance with the intentions of the other;(b)that of partners in the same partnership, unless the Commissioner is satisfied that it is not reasonable to expect that either person will act in accordance with the intentions of the other;(c)that of an entity and—(i)a person who—(aa)either alone or together with an associate or associates under another application of this definition; and(bb)whether directly or through one or more interposed entities,controls or may benefit from fifty percent or more of the rights to income or capital or voting power of the entity; or(ii)under another application of this definition, is an associate of a person to whom subparagraph (i) applies; or(d)in any case not covered by paragraphs (a) to (c), such that one may reasonably be expected to act, other than as employee, in accordance with the intentions of the other;"banking business" means business of a financial institution approved under the Banking and Financial Institutions Act;[Cap. 342]"business" includes—(a)a trade, concern in the nature of trade, manufacture, profession, vocation or isolated arrangement with a business character; and(b)a past, present or prospective business, but excludes employment;"business asset" means an asset to the extent to which it is employed in a business and includes a membership interest of a partner in a partnership but excludes—(a)trading stock or a depreciable asset;(b)an interest in land held by an individual that has a market value of less than ten million shillings at the time it is realised and that has been used for agricultural purposes for at least two of the three years prior to realisation;(c)the beneficial interest of a beneficiary in a resident trust;(d)shares in a corporation where receipt of a dividend in respect of the shares is exempt in the hands of the shareholder under section 54(2); and(e)shares and securities listed on the Dar es Salaam Stock Exchange that are owned by a resident person or by a non-resident person who either alone or with other associates controls less than twenty five percent of the controlling shares of the issuer company;"capitalisation of profits" by an entity, includes a capitalisation by way of issuing bonus, membership interests or increasing the amount paid upon membership interests in the entity or otherwise crediting profits to a capital or premium account of the entity;"certified public accountant in public practice" has the meaning ascribed to it by the Accountants and Auditors (Registration) Act;[Cap. 286]"chargeable income" has the meaning ascribed to it by section 6;"charitable organisation" has the meaning ascribed to it by section 64;"Class of depreciable assets" means a class determined in accordance with the provisions of paragraph 1 of the Third Schedule;"Commission" means the Commission of Minerals established under section the Mining Act;[Cap. 123]"Commissioner" means the Commissioner General appointed under the Tanzania Revenue Authority Act;[Cap. 399]"commuted pension" means a payment received by an individual on retirement of the individual for the surrender of at least half of the individual's pension rights in respect of a retirement fund;"corporation" means any company or body corporate established, incorporated or registered under any law in force in the United Republic or elsewhere, an unincorporated association or other body of persons, a Government, a political subdivision of a Government, a public authority, public institution international organisation and a unit trust but does not include partnership;"consumption expenditure" has the meaning ascribed to it by section 11;"controlled foreign trust" and "controlled foreign corporation" means a non-resident trust or corporation in which a resident person owns a membership interest, whether directly or indirectly through one or more interposed non-resident entities, and where—(a)the person is associated with the trust or corporation; or(b)there exist between one and four other resident persons which, if associated with the person, would cause the person to be associated with the trust or corporation;"cost of an asset" has the meaning ascribed to it by section 37;"debt claim" means an asset representing a right of one person to receive a payment from another person and includes a deposit with a financial institution, account receivable, note, bill of exchange or bond;"decommissioning fund" with respect to petroleum operations means a fund established under the Petroleum Act;[Cap. 392]"debt obligation" means the obligation corresponding to a debt claim;"dependent of an individual" with respect to a year of income, means a relative of the individual who has total income that does not exceed two hundred fifty thousand shillings and receives substantial support from the individual during the whole year of income for the necessities of life;"depreciable asset" means an asset employed wholly and exclusively in the production of income from a business, and which is likely to lose value because of wear and tear, obsolescence or the passage of time but excludes goodwill, mineral or petroleum rights and other interest in land, a membership interest in an entity and trading stock;"depreciation basis" at the end of a year of income with respect to a pool of depreciable assets, has the meaning ascribed to it by paragraph 3 of the Third Schedule;"development area" has the meaning ascribed to it under the Petroleum Act;[Cap. 392]"development licence" has the meaning ascribed to it under the Petroleum Act;"development operations" has the meaning ascribed to it under the Petroleum Act;[Cap. 392]"distribution" by an entity:(a)means—(i)a payment made by the entity to any of its members, in any capacity to the extent that the amount of the payment exceeds the amount of any payment made by the member to the entity in return for the entity's payment; or(ii)any re-investment of dividends which enhances the value of shares;(iii)any capitalisation of profits;(b)includes a payment made by the entity to one of its members on cancellation, redemption or surrender of a membership interest in the entity, including as a result of liquidation of the entity or as a result of the entity purchasing a membership interest in itself;(c)excludes a payment of the type referred to in paragraph (a)(i) or (b)—(i)to the extent to which the payment is directly included in calculating the member's income or in calculating a final withholding payment, other than by reason of being a distribution; and(ii)without limiting any amount treated as a distribution by paragraph (a)(ii), that consists of the issue of further membership interests in the entity to the entity's members in approximate proportion to the members' existing rights to share in dividends of the entity; and(d)in the case of a controlled foreign trust or corporation, is interpreted in accordance with section 75;"dividend of an entity" means a distribution by the entity to the extent that it is not a repayment of capital;"domestic asset" means—(a)an asset owned by a resident person (other than foreign land or buildings or an asset held by a foreign permanent establishment of the person) or held by a domestic permanent establishment;(b)an interest in land or a building situated in the United Republic; and(c)shares in a resident corporation whether the owner of the shares together with associates controls or within the previous five years controlled, either directly or indirectly, twenty five percent or more of the voting power in the corporation;"domestic liability" means a liability owed by a resident person (other than a liability attributable to a foreign permanent establishment of the person) or attributable to a domestic permanent establishment;"domestic permanent establishment" means all permanent establishments of a non-resident individual, partnership, trust or corporation situated in the United Republic;"downstream activities" has the meaning ascribed to it under the Petroleum Act;[Cap. 392]"employee" means an individual who is the subject of an employment conducted by an employer;"employer" means a person who conducts, has conducted or has the prospect of conducting the employment of an individual;"employment" means—(a)a position of an individual in the employment of another person;(b)a position of an individual as manager of an entity other than as partner of a partnership;(c)a position of an individual entitling the individual to a periodic remuneration in respect of services performed; or(d)a public office held by an individual, and includes a past, present and prospective employment;"entity" means a partnership, trust or corporation;"entity of a public character" means an entity established and functions solely for a public purpose and which operates in such a way that:(a)its membership is open to the general public or an identifiable group of a community with common interests;(b)it operates for purposes other than deriving profit or gain;(c)it does not allow any distribution or deemed distribution of profit generated out of its charitable business; and(d)its profit is ploughed back and used solely for improving or expansion of the original charitable purposes or function;"excluded expenditure" has the meaning ascribed to it by section 11;"exempt amount" means an amount exempt from income tax by reason of section 10, 52, 60 or 63;"exploration area" has the meaning ascribed to it under the Petroleum Act;[Cap. 392]"exploration licence" has the meaning ascribed to it under the Petroleum Act;"exploration operations" has the meaning ascribed to it under the Petroleum Act;"farm-out arrangement" with respect to a mineral right or a petroleum right includes an arrangement for the transfer of part of the right in return for consideration that includes in whole or in part an obligation on the part of the transferee to meet a disproportionate amount of future expenditure with respect to mineral operations or petroleum operations conducted with respect to the right, as the case requires;"financial cost" means any amount payable under a financial instrument or a loss from the realisation of a financial instrument, includes the payment of interest but excludes a distribution by an entity;"final withholding payment" has the meaning ascribed to it by section 86;"financial institution" means a bank or financial institution approved under the Bank of Tanzania Act or the Banking and Financial Institutions Act;[Caps. 197 and 342]"foreign currency debt claim" means a debt claim that is denominated in a currency other than Tanzanian shillings;"foreign income tax" means income tax imposed by a foreign country and includes a final withholding tax or branch profits tax imposed by a foreign country;"foreign permanent establishment" means all permanent establishments of an individual, partnership, trust or corporation that are situated in any one country that is not the country in which the individual, partnership, trust or corporation is resident but excludes a domestic permanent establishment;"foreign source" means an amount that is not treated as having a source in the United Republic by section 67, 68 or 69, as the case requires;"full time service director" means a person at a managerial position and is in full time service in a corporation;"gain" from the realisation of an asset or liability has the meaning ascribed to it by section 36;"general insurance business" means any insurance that is not life insurance;"gift" means a payment without consideration or a payment with consideration to the extent that the market value of the payment exceeds the market value of the consideration;"incapacitated individual" means a minor or any individual who is substantially blind or physically crippled or substantially mentally retarded or who is adjudged under any law, whether of the United Republic or of any other country, to be of unsound mind;"income"—(a)from an employment, business or investment has the meaning ascribed in sections 7, 8 or 9, as the case requires;(b)when used without a reference to employment, business or investment, means a person's income from any employment, business or investment and an aggregation of such income as calculated in accordance with this Act, as the case requires; and(c)in the case of corporation with unrelieved losses referred to under section 4(1)(a), the turnover of that corporation for the year of income;"income tax" has the meaning ascribed to it by section 4;"incomings for an asset" has the meaning ascribed to it by section 38;"individual" means a natural person;"insurance business" means the business of an insurer in effecting, issuing and carrying out insurance;"interest" means a payment for the use of money and includes a payment made or accrued under a debt obligation that is not a repayment of capital, any gain realised by way of a discount, premium, swap payment or similar payment, amounts treated as interest under section 32, amounts recognised as interest under section 71(6) (b)(ii) and interest imposed under Part X of the Tax Administration Act;[Cap. 438]"investment" means the owning of one or more assets of a similar nature or that are used in an integrated fashion, on similar terms and subject to similar conditions, including as to location and includes a past, present and prospective investment, but does not include a business, employment and the owning of assets, other than investment assets, for personal use by the owner;"investment asset" means shares and securities in a corporation, a beneficial interest in a non-resident trust and an interest in land and buildings but does not include—(a)business assets, depreciable assets and trading stock;(b)a private residence of an individual that has been owned continuously for three years or more and lived in by the individual continuously or intermittently for a total of three years or more, other than a private residence that is realised for a gain in excess of fifteen million shillings;(c)an interest in land held by an individual that has a market value of less than ten million shillings at the time it is realised and that has been used for agricultural purposes for at least two of the three years prior to realisation; and(d)shares or securities listed on the Dar es Salaam Stock Exchange that are owned by a resident person or a non-resident person who either alone or with other associate controls less than twenty five percent of the controlling shares of the issuer company;"lease" means an arrangement providing a person with a temporary right in respect of an asset of another person, other than money, and includes a licence, profit-a-prendre, option, rental agreement, royalty agreement and tenancy;"licence area"—(a)with respect to mining operations, means the area covered by the mineral right in question; and(b)with respect to petroleum operations, means the exploration or development area with respect to which the operations are conducted;"licenced dealer" has a meaning ascribed to it in the Mining Act;[Cap. 123]"life insurance" means insurance of any of the following classes:(a)insurance where the specified event is the death of an individual who is the insured or an associate of the insured;(b)insurance where—(i)the specified event is an individual who is the insured or an associate of the insured sustaining personal injury or becoming incapacitated; and(ii)the insurance agreement is expressed to be in effect for at least five years or without limit of time and is not terminable by the insurer before the expiry of five years except in circumstances prescribed by the regulations;(c)insurance under which an amount or series of amounts is to become payable to the insured in the future; and(d)re-insurance of insurance referred to under paragraphs (a) to (c);"life insurance business" means the business of an insurer in effecting, issuing and carrying out life insurance;"loss from any business or investment" has the meaning ascribed to it by section 19 and from the realisation of an asset or liability, has the meaning ascribed to it by section 36;"manager" in relation to an entity—(a)means any councillor, director, manager, member, officer or other person who participates or may participate, whether alone or jointly with other persons, in making senior management decisions on behalf of the entity; and(b)includes a partner of a partnership, a trustee of a trust and a person in accordance with whose directions and instructions the entity or a person described in paragraph (a) is required or accustomed to act;"market value" means a market value determined under section 27;"member" in relation to an entity, means any person who owns a membership interest in the entity;"membership interest" in an entity means a right, including a contingent right and whether of a legal or equitable nature, to participate in any income or capital of the entity and includes the interest of a partner in a partnership, the interest of a beneficiary in a trust and shares in a corporation;"midstream activities" has the meaning ascribed to it under the Petroleum Act;[Cap. 392]"mineral" has the meaning ascribed to it under the Mining Act;[Cap. 123]"mineral rights" has the meaning ascribed to it under the Mining Act;"mining" means intentionally winning minerals and every method or process by which mineral is won;"mining licence" means special mining licence, mining licence or primary mining licence defined as such under the Mining Act;[Cap. 123]"mining operations" means prospecting, mining or operations connected with prospecting or mining carried out pursuant to mineral rights granted under the Mining Act;[Cap. 123]"minor" with respect to a year of income means an individual under the age of eighteen years at the end of the year of income;"money transfer agent" means any person rendering money transfer service on behalf of the money transfer service provider;"money transfer commission" means a payment in respect of money transfer service paid or payable to a money transfer agent;"National Oil Company" has the meaning ascribed to it under the Petroleum Act;[Cap. 392]"natural resource" means minerals, petroleum, water or any other non-living or living resource that may be taken from land or the sea;"natural resource payment" means any payment, including a premium or like amount, for the right to take natural resources from land or the sea or calculated in whole or part by reference to the quantity or value of natural resources taken from land or the sea;"net cost" for an asset or liability to a particular time means—(a)in the case of a depreciable asset, its share of the written down value of the pool to which it belongs at that time apportioned according to the market value of all the assets in the pool; and(b)in the case of any other asset or a liability, the amount by which cumulative costs for the asset or liability exceed cumulative incomings for the asset or liability to the time;"net gains" from the realisation of investment assets of an investment of a person for a year of income has the meaning ascribed to it by section 36;"parastatal organisation" means—(a)a local authority of the United Republic;(b)a body corporate established by or under any Act or Ordinance of the United Republic other than the Companies Act,[Cap. 212]and any company registered under the Companies Act where—(i)in the case of a company limited by shares, not less than fifty percent of the issued share capital of the company is owned by the Government or an organisation which is a parastatal organisation under this definition; or(ii)in the case of a company limited by guarantee—(aa)the members of the company include the Government or an organisation which is a parastatal organisation under this definition; and(bb)such members have undertaken to contribute not less than fifty percent of the amount to be contributed by members in the event of the company being wound up;"partnership" means any association of individuals or bodies corporate carrying on business jointly, irrespective of whether the association is recorded in writing;"payment" includes the transfer of assets or money, the transfer or decrease of a liability, the provision of services, the use or availability for use of money or an asset and the creation of an asset in another person;"permanent establishment" means a place where a person carries on business and includes—(a)a place where a person is carrying on business through an agent, other than a general agent of independent status acting in the ordinary course of business as such;(b)a place where a person has used or installed, or is using or installing substantial equipment or substantial machinery; and(c)a place where a person is engaged in a construction, assembly or installation project for six months or more, including a place where a person is conducting supervisory activities in relation to such a project;"perpetual loss corporation rules" means those rules set up by the definition of "income" in section 3 and sections 4(1)(a) and 6(1)(c) and paragraph 3(3) of the First Schedule;"person" means an individual or an entity;"petroleum" has the meaning ascribed to it under Petroleum Act;[Cap. 392]"petroleum operations" has the meaning ascribed to it under the Petroleum Act;"petroleum right" means an exploration licence or a development licence granted under the Petroleum Act and includes—(a)separately, the interest of a contractor under a Production Sharing Agreement with respect to each exploration licence granted with respect to the contract area;(b)separately, the interest of a contractor under a Production Sharing Agreement with respect to each development licence granted with respect to the contract area; and(c)data or information pertaining to petroleum operations;"production operations" has the meaning ascribed to it under the Petroleum Act;[Cap. 392]"Production Sharing Agreement" means—(a)an agreement concluded under section 47 of the Petroleum Act between the Government of the United Republic, the National Oil Company and another person "the contractor"; and[Cap. 392](b)a tripartite agreement between the Government of the United Republic, the National Oil Company and a contractor under which the National Oil Company engages the contractor to carry out on its behalf petroleum operations in an exploration or development area with respect to an exploration or development licence held by the National Oil Company;"prospecting" with respect to mineral right means prospecting operations as provided for under section 4 of the Mining Act and includes retention under retention licence;"pool of depreciable assets of a person for a year of income" has the meaning ascribed to it by paragraph 1 of the Third Schedule;"realisation" of an asset has the meaning ascribed to it by section 39, and of liability has the meaning ascribed to it under section 40;"rehabilitation" with respect to a mineral operations or with respect to processing, smelting or refining minerals means abandonment activities and includes reclamation, rehabilitation, restoration and closure of the operation as required by law or under the terms of the relevant mineral right or development agreement;"rehabilitation fund" with respect to mining operations or with respect to processing, smelting or refining minerals means a fund—(a)required by law, a mineral right or under a development agreement and approved for that purpose by the Minister responsible for mining;(b)which is established to meet expenses to be incurred in the course of rehabilitation of the operations including expenses under an approved mine closure plan; and(c)where contributions to the fund are placed beyond the control of the person conducting the operations;"rehabilitation bond" with respect of mining operation has the meaning ascribed to it by the Mining Act;[Cap. 123]"relative" means the individual’s child, spouse, parent, grandparent, grandchild, sibling, aunt, uncle, nephew, niece or first cousin, including by way of marriage or adoption;"religious organisation" means a resident entity of a public character established for the advancement religion that has been issued with ruling by the Commissioner under section 131 currently in force stating that, it is a religious organisation;"rent" means any payment made by the lessee under a lease of a tangible asset including any premium and any other payment for the granting of the lease but excludes a natural resource payment and a royalty;"repatriated income" has the meaning ascribed to it under section 72;"residence" or "resident" with respect to a person has the meaning ascribed to it under section 66;"retention licence" has the meaning ascribed to it under the Mining Act;[Cap. 123]"retirement contribution" means a payment made to a retirement fund for the provision or future provision of retirement payments;"retirement fund" means any entity established and maintained solely for the purposes of accepting and investing retirement contributions in order to provide retirement payments to individuals who are beneficiaries of the entity;"retirement payment" means a payment, by way of a lump sum, pension or commuted pension, made by a person to—(a)an individual in the event of the individual's retirement; or(b)a relative of an individual in the event of the individual's death;"return of income" has the meaning ascribed to it by section 91;"royalty" means any payment made by the lessee under a lease of an intangible asset and includes payments for—(a)the use of, or the right to use, a copyright, patent, design, model, plan, secret formula or process or trademark;(b)the supply of know-how including information concerning industrial, commercial or scientific equipment or experience;(c)the use of, or right to use, a cinematography film, videotape, sound recording or any other like medium;(d)the use of, or right to use, industrial, commercial or scientific equipment;(e)the supply of assistance ancillary to a matter referred to in paragraphs (a) to (d); or(f)a total or partial forbearance with respect to a matter referred to in paragraphs (a) to (e),but excludes a natural resource payment;"separate mining operation" has the meaning ascribed to it under section 65C;"separate petroleum operation" has the meaning ascribed to it under section 65L;"service" has the meaning ascribed to it under sections 32 and 33 of the Tax Administration Act;[Cap. 438]"service fee" means a payment to the extent to which, based on market values, it is reasonably attributable to services rendered by a person through a business of that person or a business of any other person and includes a payment for any theatrical or musical performance, sports or acrobatic exhibition or any other entertainment performed, conducted, held or given;"service rendered" means transmitting or delivering of service in the United Republic of Tanzania irrespective of the place of performance of service;"special mining licence" has the meaning ascribed to it under the Mining Act;[Cap. 123]"shareholder" means a person who is a member of a corporation;"source" has the meaning ascribed to it under sections 67, 68 or 69, as the case requires;"statutory rate" in relation to calendar year means the prevailing discount rate determined by the Bank of Tanzania;"strategic investor" means an investor who has been determined as such under the Tanzania Investment Act;[Cap. 38]"tax" has the meaning ascribed to it under section 78;"technical service" in respect of mining or petroleum operations, means services in respect of earthmoving, engineering and construction and includes geological, geotechnical and metallurgical services, seismic survey, data interpretation, drilling or any such services;"total income" has the meaning ascribed to it under section 5;"trading stock" means assets owned by a person that are sold or intended to be sold in the ordinary course of a business of the person, work in progress on such assets and inventories of materials to be incorporated into such assets and includes, in the case of a person carrying on a banking business, loans made in the ordinary course of that business;"trust" means an arrangement under which a trustee holds assets but excludes a partnership and a corporation;"trustee"—(a)means an individual or body corporate holding assets in a fiduciary capacity for the benefit of identifiable persons or for some object permitted by law and whether or not the assets are held alone or jointly with other persons or the individual or body corporate is appointed or constituted trustee by personal acts, by will, by order or declaration of a court or by other operation of the law; and(b)includes—(i)any executor, administrator, tutor or curator;(ii)any liquidator, receiver, trustee in bankruptcy or judicial manager;(iii)any person having the administration or control of assets subject to a usufruct, fideicommissum or other limited interest;(iv)any person who manages the assets of an incapacitated individual; and(v)any person who manages assets under a private foundation or other similar arrangements;"turnover" in relation to a business by a resident person for the year of income, means an amount to be included in calculating the person's income under section 8 without deducting any amount under Subdivision D of Division I of Part III;"unapproved retirement fund" means a retirement fund that is not an approved retirement fund;"underlying ownership"—(a)in relation to an entity, means membership interests owned in the entity, directly or indirectly through one or more interposed entities, by individuals or by entities in which no person has a membership interest; or(b)in relation to an asset owned by an entity, means the asset owned by the persons having underlying ownership of the entity in proportion to that ownership of the entity;"unit trust" means—(a)an arrangement under which a trustee holds assets for the benefit of at least twenty persons; and(b)where the entitlements of the persons to participate in the income or capital of the arrangement are divided into units such that the entitlements are determined by the number of units owned;"upstream activities" has the meaning ascribed to it under the Petroleum Act;[Cap. 392]"withholdee" means a person receiving or entitled to receive a payment from which income tax is required to be withheld under Subdivision A of Division II of Part VII;"withholding agent" means a person required to withhold income tax from a payment under Subdivision A of Division II of Part VII;"written down value" of a pool of depreciable assets—(a)at the end of a year of income has the meaning ascribed to it under paragraph 3(4) of the Third Schedule; and(b)at a particular time ("the time") during a year of income means—(i)the written down value of the pool at the end of the previous year of income; plus(ii)expenditure incurred prior to the time, which is added to the depreciation basis of the pool during the year of income or to be added during the following year of income under paragraph 3(5) of the Third Schedule; less(iii)incomings derived during the year of income or to be derived with respect to a realisation occurring prior to the time in respect of assets that are or have been in the pool; and"year of income" has the meaning ascribed to it under section 20.[Acts Nos. 13 of 2008 s. 13; 8 of 2012 s. 19; 4 of 2013 s. 18; 2 of 2014 s. 32; 10 of 2015 s. 113; 2 of 2016 s. 17; 4 of 2017 s. 17; 7 of 2017 s. 32A; 4 of 2018 s. 23; Cap. 438; Cap. 4 s. 8]Part II – Imposition of income tax
4. Charge of tax
Part III – Income tax base
Division I: Calculating the income tax base
Subdivision A: Total income
5. Total income
Subdivision B: Chargeable income
6. Chargeable income
7. Income from employment
8. Income from business
9. Income from investment
Subdivision C: Exemption from tax
10. Minister may exempt income from tax
Subdivision D: Deductions
11. General principles of deductions
12. Interest
13. Trading stock
14. Repair and maintenance expenditure
15. Agriculture improvement, research development and environmental expenditure
16. Gifts to public, charitable and religious institutions
17. Depreciation allowances for depreciable assets
For the purposes of calculating a person's income for a year of income from any business, there shall be deducted in respect of depreciation of depreciable assets owned and employed by the person during the year of income wholly and exclusively in the production of the person's income from the business the allowances granted under the Third Schedule.18. Losses on realisation of business assets and liabilities
For purposes of calculating a person's income for a year of income from any business, there shall be deducted any loss of the person, as calculated under Division III of this Part, from the realisation during the year of income of—19. Losses from business or investment
Division II: Rules governing amounts used in calculating the income tax base
Subdivision A: Tax accounting and timing
20. Year of income
21. Basis of accounting for income tax purposes
22. Cash basis accounting
Subject to this Act, a person who accounts for income tax purposes on a cash basis—23. Accrual basis accounting
24. Claim of right
For purposes of sections 22 and 23, an amount shall be treated as derived or expenditure incurred by a person notwithstanding that the person is not legally entitled to receive the amount or liable to make the payment, if the person claims to be legally entitled to receive, or legally obliged to pay the amount.25. Reverse of amounts including bad debts
26. Long-term contracts
Subdivision B: Quantification, allocation and characterisation of amounts
27. Quantification according to market value
28. Quantification in shillings
29. Indirect payments
30. Jointly owned investment
31. Compensation and recovery payments
Subject to the provisions of section 25, where a person or an associate of the person derives an amount "the compensation amount" which compensates for or represents recovery of—32. Annuities, instalment sales and finance leases
33. Transfer pricing and other arrangements between associates
34. Income splitting
35. ***
[Repealed by Act No. 10 of 2015 s. 116]Division III: Assets and liabilities
Subdivision A: Central concepts
36. Calculation of gains and losses
37. Cost of asset
38. Incomings for asset
Subject to this Act, incomings for an asset of a person means—39. Realisation
A person who owns an asset shall be treated as realising the asset—40. Application of this Division to liabilities
41. Reverse, quantification and compensation for costs and incomings
Subdivision B: Special rules
42. Realisation with retention of asset
Where a person realises an asset in any of the manners described in section 39(d) to (h)—43. Transfer of asset to spouse or former spouse
Where on divorce settlement or bona fide separation agreement an individual transfers an asset to a spouse or former spouse and an election for this subsection to apply is made by the spouse or former spouse in writing—44. Transfer of asset to associate or for no consideration
45. Involuntary realisation of asset with replacement
46. Realisation by separation
Subject to the provisions of section 32, where rights or obligations with respect to an asset owned by one person are created in another person, including by way of lease of an asset or part thereof, then—47. Apportionment of costs and incomings
Part IV – Rules applicable to particular types of persons
Division I: In general
Subdivision A: Partnerships
48. Principles of taxation
49. Partnership income or loss
50. Taxation of partners
51. Cost and incomings of partner’s membership interest in partnership
Subdivision B: Trusts
52. Taxation of trusts
Subdivision C: Corporations
53. Taxation of corporations
54. Taxation of shareholders
Division II: General provisions applicable to entities
55. Asset dealings between entities and members
Subject to the provisions of section 44(2), where an asset is realised by way of transfer of ownership of the asset by an entity to one of its members or vice versa—56. Change in control
57. Income or dividend stripping
Part V – Special industries
Division I: Insurance business
58. General insurance business
59. Life insurance business
60. Proceeds from insurance
Division II: Retirement savings
61. Retirement contributions to approved retirement fund
62. Taxation of retirement funds
63. Retirement payments
Division III: Charitable organisations, clubs and trade associations
64. Charitable organisations
65. Clubs and trade associations
Division IV: Minerals
Subdivision A: Prospecting and mining
65A. Application of subdivision
This subdivision applies where a person is conducting mining operations without a separate license solely for processing, smelting or refining of minerals.[Act No. 2 of 2016 s. 26]65B. Principles of taxation
65C. Separate mining operations
65D. Income from mining operations
In calculating a person's income from a separate mining operations for a year of income, there shall be included, together with any other amounts required to be included under other provisions of this Act, the following—65E. Deduction for mining operations
65F. Losses from mining operations
65G. Bonus payments
65H. Realisation of mineral rights
65I. Rehabilitation fund
Subdivision B: Processing, smelting and refining
65J. Licensee conducting processing, smelting or refining
Division V: Petroleum
Subdivision A: Petroleum operations
65K. Principles of taxation
65L. Separate petroleum rights
65M. Income from petroleum rights
65N. Deductions for petroleum rights
65O. Losses from petroleum rights
65P. Bonus payments
Bonus payments made with respect to a petroleum right, whether in form of a lump sum or otherwise, shall not be deductible in calculating income from a separate petroleum right:Provided that, bonus payments shall neither be included in the cost of the petroleum right nor depreciated over the term of the right.[Act No. 2 of 2016 s. 26; Cap. 4 s. 8]65Q. Realisation of petroleum rights
65R. Decommissioning funds
Subdivision B: Midstream and downstream activities
65S. Midstream and downstream activities
Part VI – International
Division I: Residence and source
66. Resident persons
67. Source of income and loss
68. Source of directly included and deducted amounts
69. Source of payments
The following payments have a source in the United Republic—Division II: Permanent establishments
70. Principles of taxation
71. Calculating income of permanent establishment
72. Repatriated income of domestic permanent establishment
Division III: Controlled foreign trusts and corporations
73. Principles of taxation
74. Unallocated income of controlled foreign trust and corporation
75. Taxation of members of controlled foreign trusts or corporations
76. Cost and incomings of member's interest in controlled foreign trust or corporation
Division IV: Foreign tax relief
77. Foreign tax relief
Part VII – Tax payment procedure
Division I: General obligations
78. Types of tax and methods of payment
79. Time for payment of tax
Subject to section 55 of the Tax Administration Act, tax shall be payable—80. ***
[Repealed by Act No. 10 of 2015 s. 120]80A. ***
[Repealed by Act No. 10 of 2015 s. 120]Division II: Income tax payable by withholding
Subdivision A: Withholding obligations
81. Withholding by employers
82. Withholding from investment returns
83. Withholding from service fees and contract payments
83A. Withholding of income tax for goods
83B. ***
Subdivision B: Procedure applicable to withholding
84. Statements and payments of tax withheld or treated as withheld
85. Withholding certificates
86. Final withholding payments
87. Credit for non-final withholding tax
The withholdee of a payment that is not a final withholding payment shall be treated as having paid any income tax—Division III: Income tax payable by instalment
88. Payment of income tax by quarterly instalment
89. Statement of estimated tax payable
90. Single instalment at time of realisation or receipt
Division IV: Income tax payable on assessment
Subdivision A: Returns
91. Returns of income
92. Return of income not required
Unless requested by the Commissioner by notice in writing served on the person and subject to a right of the person to elect to file a return, no return of income for a year of income shall be required under section 91 from—93. ***
[Repealed by Act No. 10 of 2015 s. 124]Subdivision B: Assessments
94. Self-assessment
95. ***
[Repealed by Act No. 10 of 2015 s. 124]96. ***
[Repealed by Act No. 10 of 2015 s. 124]97. ***
[Repealed by Act No. 10 of 2015 s. 124]98. ***
[Repealed by Act No. 10 of 2015 s. 124]99. ***
[Repealed by Act No. 10 of 2015 s. 124]100. ***
[Repealed by Act No. 10 of 2015 s. 124]101. ***
[Repealed by Act No. 10 of 2015 s. 124]102. ***
[Repealed by Act No. 10 of 2015 s. 124]103. ***
[Repealed by Act No. 10 of 2015 s. 124]104. ***
[Repealed by Act No. 10 of 2015 s. 124]105. ***
[Repealed by Act No. 10 of 2015 s. 124]106. ***
[Repealed by Act No. 10 of 2015 s. 124]107. ***
[Repealed by Act No. 10 of 2015 s. 124]108. ***
[Repealed by Act No. 10 of 2015 s. 124]109. ***
[Repealed by Act No. 10 of 2015 s. 124]110. ***
[Repealed by Act No. 10 of 2015 s. 124]111. ***
[Repealed by Act No. 10 of 2015 s. 124]112. ***
[Repealed by Act No. 10 of 2015 s. 124]113. ***
[Repealed by Act No. 10 of 2015 s. 124]114. ***
[Repealed by Act No. 10 of 2015 s. 124]115. ***
[Repealed by Act No. 10 of 2015 s. 124]116. ***
[Repealed by Act No. 10 of 2015 s. 124]117. ***
[Repealed by Act No. 10 of 2015 s. 124]118. ***
[Repealed by Act No. 10 of 2015 s. 124]119. ***
[Repealed by Act No. 10 of 2015 s. 124]120. ***
[Repealed by Act No. 10 of 2015 s. 124]121. ***
[Repealed by Act No. 10 of 2015 s. 124]122. ***
[Repealed by Act No. 10 of 2015 s. 124]123. ***
[Repealed by Act No. 10 of 2015 s. 124]124. ***
[Repealed by Act No. 10 of 2015 s. 124]125. ***
[Repealed by Act No. 10 of 2015 s. 124]126. ***
[Repealed by Act No. 10 of 2015 s. 124]127. ***
[Repealed by Act No. 10 of 2015 s. 124]Part X – Administration
Division II: Official documentation and registration
128. International agreements
129. Regulations
The Minister may make regulations for the better carrying into effect of the principles, purposes and provisions of this Act".[Act No. 4 of 2018 s. 27]130. ***
[Repealed by Act No. 10 of 2019 s. 124]131. ***
[Repealed by Act No. 10 of 2019 s. 124]132. ***
[Repealed by Act No. 10 of 2019 s. 124]133. ***
[Repealed by Act No. 10 of 2019 s. 124]134. ***
[Repealed by Act No. 10 of 2019 s. 124]135. ***
[Repealed by Act No. 10 of 2019 s. 124]136. ***
[Repealed by Act No. 10 of 2019 s. 124]137. ***
[Repealed by Act No. 10 of 2019 s. 124]138. ***
[Repealed by Act No. 10 of 2019 s. 124]139. ***
[Repealed by Act No. 10 of 2019 s. 124]140. ***
[Repealed by Act No. 10 of 2019 s. 124]Part XI – Transitional provisions
141. Repeal
142. Transition
143. Agreements and certificates for fiscal stability
144. Assets and liabilities
145. ***
[Repealed by Act No. 2 of 2016 s. 31]History of this document
30 November 2019 this version
Consolidation
01 July 2004
Commenced
Subsidiary legislation
Title | Numbered title |
---|---|
Income Tax (Non-Resident Electronic Services Provider) Regulations, 2022 | Government Notice 478U of 2022 |
Cited documents 0
Documents citing this one 99
Judgment 84
Gazette 11
Legislation 4
1. | Government Loans, Guarantees and Grants Act | 1 citation |
2. | Privatisation Trust Act | 1 citation |
3. | Education Fund Act | |
4. | Tax Reserve Certificates Act |