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:
|
|
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
|
Source: PWC
The Government of Mozambique has established tax treaties with a number of countries.
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 profitsSources: KPMG