A. Income Tax: Scheme of the Act
The Taxation System of the Republic of Mozambique integrates both national and local taxes, the latter being defined in terms of the Local Government Finances Law.
The national taxes are classified as direct and indirect, including direct taxes on income and wealth and indirect taxes on expenditure (In accordance with Law no. 15/2002, of 26 June, the Basic Law of the Mozambican Taxation System.)
B. Income Tax on Resident Corporations (National Government)
1. Name of Tax and Levied in Terms of Which (Name, Number and Year)
The Income Tax on Artificial Entities Tax Law was approved by Ministerial Council Decree no. 21/2002, of 30 July.
2. Department Responsible for Administration
The entity responsible for the administration of this tax is the National Taxation and Auditing Administration (Portuguese acronym is DNIA), which falls under the Ministry of Planning and Finance, and has various national Tax Offices.
3. Definition and Classification
Income Tax on Artificial Entities is levied on all income earned during the tax period by passive entities, even if such revenue emanates from illegal acts.
1.1 Artificial entities and other entities with registered office located, or effective control held, in Mozambican territory, are subject to Income Tax on Artificial Entities on all its revenues, including those earned outside of Mozambique.
1.2.1 Artificial entities and other entities without registered office located, or effective control held, in Mozambican territory, are subject to Income Tax on Artificial Entities only in respect of revenues earned in Mozambican territory, such revenue being imputed to any such entity’s stable establishment situated in Mozambique.
2. Passive entities
- Trading or civil enterprises operating in a commercial form, cooperatives, public enterprises and other public or private law artificial entities with registered office located, or effective control held, in Mozambican territory;
- Those entities without legal status, with registered office located, or effective control held, in Mozambican territory, whose revenue is not directly subject to either Individual Income Tax or Income Tax on Artificial Entities by the individuals or artificial persons who compose such entities without legal body;
- Those entities, with or without legal status, and without registered office located, or effective control held, in Mozambican territory, and whose revenues obtained in such territory are not subject to Individual Income Tax.
Those artificial persons and other entities with registered office located, or effective control held, in Mozambican territory, are considered to be resident.
4. Basis of Taxation
4.1 Source-based or residence based
Income Tax on Artificial Entities is levied on all income earned during the tax period by passive entities, even if such revenue emanates from illegal acts.
Artificial entities and other entities with registered office located, or effective control held, in Mozambican territory, are subject to Income Tax on Artificial Entities on all its revenues, including those earned outside of Mozambique.
2. Passive entities-
Trading or civil enterprises operating in a commercial form, cooperatives, public enterprises and other public or private law artificial entities with registered office located, or effective control held, in Mozambican territory;
Those entities without legal status, with registered office located, or effective control held, in Mozambican territory, whose revenue is not directly subject to either Individual Income Tax or Income Tax on Artificial Entities by the individuals or artificial persons who compose such entities without legal body;
Those entities, with or without legal status, and without registered office located, or effective control held, in Mozambican territory, and whose revenues obtained in such territory are not subject to Individual Income Tax.
4.2 If source, define:
4.2.1 Actual source
4.2.2 Deemed source
4.3 If residence, define:
4.3.1 Define resident
Those artificial persons and other entities with registered office located, or effective control held, in Mozambican territory, are considered to be resident.
4.3.2 Exclusions from the definition of resident:
4.3.3 Ceasing of residency provided for in the Act
5. Time Tax is Levied
6. Included in Tax Base
7. Year of Assessment
8. Computation of Taxable Income
8.1 Exemptions
8.1.1 Partial exemptions (amounts exempt irrespective of the identity of the recipient):
8.1.2 Absolute exemptions (taxpayers enjoying completed exemption from tax on income):
8.2 Deductions and recoupments
8.2.1 Allowable deductions
8.2.2 Valuation of inventory/trading stock
8.2.3 Reserves and provisions
8.2.4 Non-deductible expenses
8.2.5 Recoupments
8.3 Depreciable regime
8.3.1 Tangibles (movable and immovable assets, for example plant and machinery)
8.3.2 Intangibles/incorporeals (for example, copyright, patents, goodwill and other intellectual rights)
8.4 Treatment of losses
9. Foreign Exchange Losses and Gains
10. Branch Profits Tax
11. Group Taxation/Consolidated Returns
12. Presumptive Tax Measures (for example, a minimum tax in the form of a gross asset tax)
13. Rates
14. Rebates
15. Withholding Taxes
16. Beneficiaries of Revenue
C. Income Tax on Individuals (National Government)
1. Name of Tax and Levied in Terms of Which Act (Name, Number and Year
2. Department Responsible for Administration
3. Definition and Classification
4. Time Tax is Levied
5. Basis of Taxation
5.1 Source-based or residence based
5.2 If source, define:
5.2.1 Actual source
5.2.2 Deemed source
5.3 If residence,
5.3.1 Define resident
5.3.2 Exclusions from the definition of resident:
5.3.3 Ceasing of residency provided for in the Act
6. Included in Tax Base
7. Year of Assessment
8. Computation of Taxable Income
8.1 Exemptions (do not only indicate the heading, but provide a brief explanation)
8.1.1 Partial exemptions (amounts exempt irrespective of the identity of the recipient):
8.1.2 Absolute exemptions (taxpayers enjoying completed exemption from tax on income)
8.2 Deductions and recoupments
8.2.1 Allowable deductions
8.2.2 Valuation of inventory/trading stock
8.2.3 Reserves and provisions
8.2.4 Non-deductible expenses
8.2.5 Recoupments
8.3 Depreciable regime
8.3.1 Tangibles (movable and immovable assets, for example plant and machinery)
8.3.2 Intangibles/incorporeals (for example, copyright, patents, goodwill and other intellectual rights)
8.4 Treatment of losses
9. Foreign Exchange Losses and Gains
10. Rates
11. Rebates/Tax Threshold
12. Fringe Benefit Taxes (Benefits Flowing from an Employer-Employee or an Office Relationship)
13. Allowances
14. Treatment of Pension, Provident or Retirement Annuity Fund Income
15. Treatment of Professional Income
16. Treatment of Investment Income
17. Withholding Taxes
18. Beneficiary of Revenue
D. Income Tax on Non-Residents (National Government)
1. Name of Tax and Levied in Terms of Which Act (Name, Number and Year
2. Department Responsible for Administration
3. Included in Tax Base
Artificial entities and other entities without registered office located, or effective control held, in Mozambican territory, are subject to Income Tax on Artificial Entities only in respect of revenues earned in Mozambican territory, such revenue being imputed to any such entity’s stable establishment situated in Mozambique.
4. If Sourced-Based, Define (If Not Already Done)
4.1 Actual source
4.2 Deemed source:
5. Rates
6. Beneficiary of Revenue
E. Income Tax: Treatment of Dividends, Interest, Royalties and Fees
1. Dividends
2. Interest
3. Royalties
4. Fees
5. Rents
F. Income Tax: Specific Industries
1. Mining Tax
2. Insurance Business
3. Farming
4. Ships and Aircraft Owners
5. Other
G. Income Tax: Administrative Procedures (National Government)
1. Payment Periods
2. Rulings
2.1 Possibility of advance rulings
2.2 Publication of rulings
3. Codification of Revenue Practices
4. Refunds
5. Interest, Charges and Penalties
H. Income Tax: Anti-Avoidance Provisions (National Government)
1. Transfer Pricing Legislation
2. Thin Capitalisation Legislation
3. Controlled Foreign Entities (CFES)
4. Provide a Brief Discussion of General Anti-Avoidance Provisions (Both under common and statutory law)
5. Transactions Between Connected Persons
I. Capital Gains Tax on Corporations (National Government)
1. Name of Tax and Levied in Terms of Which Act (Name, Number and Year
2. Department Responsible for Administration
3. Basis of Taxation (Source-based or residence-based)
4. Time When Tax is Levied
5. Included in Tax Base
6. Exemptions/Exclusions
7. Allowable Deducations
8. Non-Deductible Expenses
9. Roll-Overs
10. Treatment of Losses
11. Rates
12. Rebates
13. Tax Period
14. Withholding Taxes
15. Beneficiary of Revenue
J. Capital Gains Tax on Individuals (National Government)
1. Name of Tax and Levied in Terms of Which Levied (Name, Number and Year)
2. Department Responsible for Administration
3. Basis of Taxation (Source-based or residence-based)
4. Time When Tax is Levied
5. Included in Tax Base
6. Exemptions
7. Allowable Deducations
8. Non-Deductible Expenses
9. Treatment of Losses
10. Rates
11. Rebates/Annual Deduction
12. Tax Period
13. Withholding Taxes
14. Beneficiary of Revenue
K. Special Taxes (Other Than Income Tax) on Certain Industries/Types of Income
1. Name of Tax and Levied in Terms of Which Act (Name, Number and Year
2. Department Responsible for Administration
3. Taxpayer
4. Included in Tax Base
5. Tax Rate
6. Beneficiary of Revenue
L. Taxation of Capital
1. Name of Tax and Levied in Terms of Which Act (Name, Number and Year
2. Department Responsible for Administration
3. Taxpayer
4. Included in Tax Base
5. Tax Rate
6. Beneficiary of Revenue
M. Donations Tax (National Government)
1. Name of Tax and Levied in Terms of Which Act (Name, Number and Year
2. Department Responsible for Administration
3. Taxpayer
4. Included in Tax Base
5. Tax Rate
6. Beneficiary of Revenue
N. Other (National Government) (National Government)
1. Name of Tax and Levied in Terms of Which Act (Name, Number and Year
2. Department Responsible for Administration
3. Taxpayer
4. Included in Tax Base
5. Tax Rate
6. Beneficiary of Revenue