Annual Statutory Accounts must be prepared on the Annual Reporting Forms provided for the purpose by the Fiscal Authorities.
Taxable income is based on the profits shown the local statutory accounts (Forms M/20 and M/22) prepared under the accounting principles contained in the PGC. Mozambican Accounting Law (the Plano Geral de Contabilidade, "PGC”) codifies Mozambican Accounting principles and rules for record keeping. The PGC has the following overriding provisions relating to the accounting books and records of all Mozambican entities.
The records must be kept in:
- Mozambique, available for inspection by the authorities
- the local currency (Meticais)
Financial Sector (Banks) must apply IFRS from 2009 Accounting Law – the PGC
- The accounting principles codified in the PGC differ in many ways from IFRS. The following examples are mentioned because they can cause fiscal problems :
- Unprovided expenses from prior periods are classified as extraordinary items and are not normally fiscally deductible
- Unrealised exchange losses on medium and long term debts are carried forward
- Provisions for inventory and debtors are limited to fixed %s
- The ledgers must comply in format with the account codes and layout stipulated in the PGC
- Transactions must be recorded according to the accounting rules laid down in the PGC
- All supporting documentation must be fiscally acceptable and kept in Mozambique available for inspection
- Legal books, summarising the ledgers, must be completed in the correct format NB rules apply to the ledgers and records, not just to reporting Accounting records
- Public Companies (SA) are required by law to be audited.
- Private Companies (Lda) do not automatically require an audit.
- Any companies which have a CPI approval also require an audit. In practice, this covers most foreign investment in Mozambique.
- Certain other categories (e.g.Finance institutions) require audit.
Note: there is no detailed audit legislation or auditing standards in Mozambique. Granting of licences to audit is done by the Ministry of Finance. Licences have been granted to the international audit firms operating in the country, who apply International Auditing Standards in their work.
Direct taxes These consist of
(A) Individual Income Tax (Imposto sobre o Rendimento de Pessoas Singulares - IRPS),and
(B) Corporate Income Tax (Imposto sobre o Rendimento de Pessoas Colectivas - IRPC).
Other taxes Indirect Taxes - e.g. Value Added Tax (IVA) Municipality Taxes – e.g. Personal Municipal Tax
The Mozambique Association of Accountants and the Association of Internal Auditors in Mozambique (AMAI) are the leading professional bodies.