Tanzania: Retained earnings of resident company subject to withholding tax (Tax Revenue Appeals Board decision)
The taxpayer would be treated like a controlled foreign corporation for income tax purposes.
The taxpayer would be treated like a controlled foreign corporation for income tax purpose
The Tax Revenue Appeals Board on 23 September 2022 held that the retained earnings of a resident company were subject to withholding tax.
Summary
The taxpayer was a Tanzania-resident company that for the years under dispute did not distribute dividends to its shareholders who are residents and nonresidents.
Accordingly, the board determined that the taxpayer would be treated like a controlled foreign corporation for income tax purposes such that its retained earnings would be subject to withholding tax.
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