Tax laws Mozambique
Mozambique's tax system encompasses various taxes, including personal and corporate income taxes, value-added tax (VAT), and municipal taxes. Below is an overview of the key tax categories:
1. Personal Income Tax:
Residents: Subject to tax on worldwide income, with progressive rates:
| Annual Income (MZN) | Tax Rate (%) | Deduction (MZN) |
|---|---|---|
| 0 – 42,000 | 10 | N/A |
| 42,001 – 168,000 | 15 | 2,100 |
| 168,001 – 504,000 | 20 | 10,500 |
| 504,001 – 1,512,000 | 25 | 37,500 |
| Over 1,512,000 | 32 | 141,540 |
Non-Residents: Taxed at a flat rate of 20% on Mozambican-source income, withheld by the employer or payer.
Municipal Tax: Varies by municipality; in Maputo, it's MZN 510 for 2024. Employers typically withhold and remit this tax.
2. Corporate Income Tax (CIT):
Residents: Subject to CIT on worldwide income at a rate of 32%.
Non-Residents with Permanent Establishment (PE): Taxed at 32% on income attributable to the PE.
Non-Residents without PE: Subject to final withholding taxes of 20% or 10% on Mozambican-source income.
Autonomous Taxation: Expenses lacking proper documentation or deemed confidential or illicit are taxed at an additional 35%, potentially resulting in an effective rate of up to 67%.
3. Value-Added Tax (VAT):
Standard Rate: 16%.
Registration: Businesses must register for VAT through a local tax representative.
4. Other Taxes:
Withholding Taxes: Applied to various payments, including dividends, interest, royalties, and services, with rates generally at 20%.
Municipal Tax: Levied on rental properties, with rates between 1% and 4% of the highest national minimum wage, determined annually.
Simplified Tax for Small Taxpayers: A flat-rate tax system for small businesses, with rates ranging from 4% to 7% of gross income, depending on the sector.
5. Transfer Pricing and Thin Capitalization:
Transfer Pricing: Companies must maintain specific documentation and submit the Annual Transfer Pricing Report (Model 20) to comply with Mozambican transfer pricing regulations.
Thin Capitalization: Interest paid to related non-resident entities exceeding twice the equity amount is non-deductible for tax purposes.
Note: Tax laws and regulations are subject to change. For the most current information, consult the Mozambican Tax Authority or seek professional tax advice.
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