Corporate income tax
- The tax year follows the calendar year. Annual tax returns must be sent by the last working day of May (except if the company does not follow the calendar year).
- The standard CIT rate is currently set at 32%. A 35% rate applies in case of undocumented expenses.
- Companies can carry forward losses for a period of 5 years.
- As for non-resident entities, the taxation of income from Mozambique is made through a 20% withholding tax (source: APIEX).
Withholding taxes (WHT)
|Type of payment||Resident company||Non-resident company|
|Standard WHT Rate (%)||Reduced Rate (%)||Standard WHT Rate (%)||Reduced Rate (%)|
|Dividends||20%||0% if paid to another local company in which the shareholding is at least 20% for a period of at least 2 years||20%||10% for stock listed on the Mozambican stock exchange|
|Interest||20%||0% if paid to a resident financial institution (bank interests)||20%||10% for stock listed on the Mozambican stock exchange|
|Fees||N.A||20%||10% for the following activities:
|Rents||20%||0% if rents obtained by a real estate company managing its own property||20%|
Note: last update: 2019. Main sources: KPMG, PWC
- Organizations that do not have their head office or place of effective management in Mozambique are subject to a 10% definitive withholding tax on the following services
|Construction & rehabilitation of infrastructures for the production, transport and distribution of electric power to rural areas, within public projects of electrification to rural areas||Freight of marine vessels for fishing & cabotage activities||International transportation|
|Maintenance of freight aircraft||Securities traded in the Mozambican Stock Exchange, except debt securities||Telecommunications services and related services|
Source: APIEX, last update: 2019
Oil and mining taxation
- Firms carrying out petroleum or mining operations in Mozambique under a concession agreement are subject to general taxation rules and to the special taxes displayed below
|Tax name||Tax base||Tax rate||Reduced rate if production intended for the development of the local industry|
|Petroleum Production Tax (IPP, Imposto sobre a Produção do Petróleo)||Value of the produced oil||10%||5%|
|Value of the produced gas||6%||3%|
|Tax on Mining Production (IPM, Imposto sobre a Produção Mineira)||Value of the extracted mineral product after treatment||1.5% for sand and stone.
3% for basic metals, charcoal and
6% for precious metals, precious and semiprecious stones and heavy sands,
8% for diamonds
|0.75% for sand and stone,
1.5% for basic metals, charcoal and ornamental rocks,
3% for precious metals, precious and semiprecious stones and heavy sands,
4% for diamonds
|Surface Tax (ISS, Imposto sobre a Superfície)||Area of the mining exploration||[MZN 17.50/ha; MZN 25,000/ha]|
|Tax on Income Deriving from Mineral Sources (Imposto sobre a Renda de Recurso Mineiro/IRRM)||Cash earnings accumulated during the year (“ganhos de caixa líquidos acumulados”)||20%|
- Special rules are applicable to determine the taxable income for the corporate income taxation.
Value added tax
- Value added tax (VAT) is a tax ultimately borne by the final consumer.
- It is levied on the supply of goods or services carried out in the national territory by a taxpayer and on the importation of goods.
- The tax liability is determined by the difference, in a given period, between VAT on sales (output VAT) and VAT on purchases (input VAT).
- Firms engaged in specific business activities (including finance, insurance, leasing) cannot recover VAT.
- Mozambique’s (unique) VAT rate is 17%.
- Some transactions are VAT exempt under certain conditions and limits, including the following:
|Exports||Certain basic foodstuffs
(maize, bread, etc.)
|Medical, Medicine & other Pharmaceutical products, condoms||Goods to be used as raw material in alimentary||Financial, Banking, Insurance & Re-Insurance||Oil & soap industry|
|Farming goods & Services for sugarcane production||Sugar and certain sugar industry products||Mosquito nets||Common bicycles||Sanitary||Gaming & betting alimentary oil and soaps|
|International transport||Public transportation services||Milk||Stamps||Education & related goods||Goods for the disable human organs & blood|
|Funeral & ambulance transport services||Garbage removal||Supplies for nurseries||Illuminating paraffin & jet-fuel products from activities of production of rations for animal feed for human
|Educational or technical newspapers, magazines & books supply of staff by religious or philosophical entities||Homes for abandoned or disabled children and the aged|
- Goods imported in Mozambique are subject to customs tariffs. The rates vary as follows:
|Sector||Import tariff (%)|
|Capital goods (class K)||5|
Note: last update: April, 2019. Source: APIEX
- The consumption of some (imported or locally produced) commodities is subject to a specific consumption tax (Imposto Consumo Específico).
- Examples of excise duty rates are provided below
|Alcoholic beverages (except wine of fresh grape)||40|
|Air vehicles without engines||35|
|Boats and other recreational or sportive crafts||35|
|Cloths and respective accessories||30|
|Wine of fresh grape||55|
Database source: PWC
Property Transfer Tax (SISA) or Municipal Property Transfer Tax
- Transfer of real estate, options to purchase and long-term leases is subject to a property transfer tax.
- The current rate is set at 2% (or 10% if the beneficiary lives in a tax haven country).
- Stamp duties must be paid for a number of documents.
- Main municipal taxes imposed on firms are the following
|Annual municipal tax on real estate||Annual municipal tax on economic activities||Annual municipal vehicle tax|
|Tax rates range from 0.4% to 0.7% of the value of the building.||Levied on commercial and industrial activities||Imposed on the use of some vehicles, including
The Government of Mozambique has established tax treaties with a number of countries.
* 8% for dividend payments by a subsidiary in Mozambique (≥25% of share capitals) to its Mauritius parent company; 10% for dividend payments by a subsidiary in Mozambique (<25% of share capitals) to its Mauritius parent company; 15% in all other cases.
** Capital gains are taxed locally if shares sold are from a company for which more than 50% of its value is formed by immovable property.
*** 8% for dividend payments by a subsidiary in Mozambique (≥25% of share capitals) to its South Africa parent company; 15% in all other cases.
^ 0% for dividend payments by a subsidiary in Mozambique (≥25% of share capitals) to its Botswana parent company; 12% in all other cases.
^^ A 10% withholding tax applies to technical fees related with software assistance; 0% in all other cases.
^^^ The exemption on capital gains is extremely restricted.
^^^^ It seems that services should be considered as business profitsSources: KPMG