Trust beneficial owners (deadline of 31 December 2021)

Finance Act 2020 introduced new reporting requirements of beneficial owners with a deadline of 31 December 2021.

Trustee Incorporation Act has also been amended to provide for requirements to file information of beneficial owners for trusts with the Administrator General.

Amendments encompass the additional of new definition of the term “beneficial owner” as well as the terms such as “arrangement” and “politically exposed person”. These terms were not defined under the Act before.

“beneficial owner” means a natural person:

1. who directly or indirectly ultimately owns or exercises substantial control over an entity or an arrangement;
2. who has a substantial economic interest in, or receives substantial economic benefit from, an entity or an arrangement directly or indirectly whether acting alone or together with other persons; 
3. on whose behalf an arrangement is conducted; or 
4. who exercises significant control or influence over a person or arrangement through a formal or informal agreement. 

“arrangement” is as defined under the Income Tax Act which says it 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).

Required particulars of beneficial owner include:

1. full name and any former or other name; 
2. date and place of birth; 
3. telephone number; 
4. nationality, national identity, number, passport number or other appropriate identification and proof of identity; 
5. residential, postal and email address, if any; 
6. place of work and position held; 
7. nature of the interest including the details of the legal, financial, security, debenture or informal arrangement giving rise to the beneficial ownership; and 
8. oath or affirmation as to whether the beneficial owner is a politically exposed person or not.

“politically exposed person” is as defined under the Anti-Money Laundering Act which says a foreign individual entrusted with prominent public functions including heads of state or government, senior politicians, senior government, judicial or military officials, senior executives of state owned corporations or agencies. 

Also a trust shall submit to the Administrator General records of non-resident beneficiary and beneficial owner of the trust.

Current deadline for submission is 31 December 2021 and compliance with the new “beneficial owner” reporting requirements that were introduced by the Finance Act 2020. However, usually changes to the trusts are filed with RITA using statutory forms and as we understand to date there are no statutory forms yet prepared / shared by the RITA / Administrator General for the trusts as has been done for other entities such as companies.

Therefore, it is important for entities trusts registered in Tanzania to take immediate steps in making arrangements to comply with the law.

Please contact us if you have any comments or questions.