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
Royalties 20% 20%
Fees N.A 20% 10% for the following activities:

  • international transport,
  • telecommunication services,
  • electrical infrastructures on rural areas,
  • preparation of vessels for fishing and coasting activities,
  • some Oil/Gas/Mining related services
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
ornamental rocks.
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
consumption
Educational or technical newspapers, magazines & books supply of staff by religious or philosophical entities Homes for abandoned or disabled children and the aged

Customs duties

  • Goods imported in Mozambique are subject to customs tariffs. The rates vary as follows:
Sector Import tariff (%)
Capital goods (class K) 5
Consumption goods 20
Intermediary goods 7.5
Raw materials 2.5

Note: last update: April, 2019. Source: APIEX

Excise tax

  • 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
Items Excise tax(%)
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
Tobacco 75
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 duty

  • Stamp duties must be paid for a number of documents.

Municipal taxes

  • 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

  • motorcycles (< 15 years old),
  • light and heavy vehicles (< 25 years old),
  • aeroplanes,
  • boats for private use

Source: PWC

The Government of Mozambique has established tax treaties with a number of countries.

Treaty partners

Treaty rate

Agreement

Dividends (%)

Interest (%)

Royalties (%)

Services (%)

Capital gains (%)

Bostwana 0/12^ 10 10 10 0**
India 7.5 10 10 10 ^^^
Italy 15 10 10 0^^^^ 0
Macau (SAR) 10 10 10 10 0
Mauritius 8/10/15 * 8 5 0^^^^ 0
Portugal 10 10 0/10 ^^ 10 0 **
South Africa 8/15 *** 8 5 0 ^^^^ 0 **
United Arab Emirates 0 0 5 0^^^^ 0**
Vietnam 10 10 10 10 0**

Notes:
* 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 profits
Sources: KPMG