Corporate income tax
Main Taxes and Rates
Corporate income tax (standard rate) : 32%
The tax rate for foreign companies : Resident companies are taxed on their overall income, while non-resident companies are only taxed on their income from Mozambique. A company is resident if its registered office or place of management or effective control is in Mozambique, or if the company is registered in the country.
All non-resident companies carrying out economic activity in Mozambique without being registered as taxpayers are subject to a one-time flat tax of 20% of their income.
Taxation of capital gains : Capital gains are considered normal income and are taxed at the corporate rate. If a taxpayer reinvests the proceeds of the sale within three tax years of the year of the sale, the gain can be carried back to the end of the third year.
Tax deductions and credits : Goodwill should be considered an intangible asset for tax amortization purposes. Interest and other financial expenses are generally deductible, unless the tax authorities consider that the interest rate applicable to a transaction is higher than the applicable market rate, the excess being subject to taxation.
Provisions for inventory depreciation, pending legal proceedings, provisions for bad debts (up to 1.5% of the provision per year), credit institutions and insurance companies, reconstruction of mines and land rehabilitation are deductible.
Charitable donations are deductible up to 5% of the previous year’s taxable income (or in full for donations to the government).
Taxes are generally deductible (except for corporate taxes), while fines and penalties are not.
Losses may be carried forward for five consecutive years, but loss carrybacks are not permitted.
Other corporate taxes : Other taxes include:
– stamp duty (0.03% to 50% on the transaction amount, i.e. MZN 0.50 to 5,000)
– transfer tax (SISA) levied at 2% (10% if the beneficiaries reside in a tax haven)
– municipal real estate tax from 0.4% (for housing) to 0.7% (for offices or mixed activities)
– municipal tax on economic activities, levied on commercial or industrial activities (rates vary depending on the sector, location and size of the premises)
– social security contributions paid by the employer are equal to 4% of the employee’s gross salary, with no ceiling
– social security charges between 0% and 32% of the salary must be deducted at source by the employer.
More information: Mozambique PEO