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 Taxation Taxable
Period Rule: Calendar year, but non-residents with branches may be granted a different period. Approval is discretionary and applications are not always successful. The new period must be maintained for five years.
Double Taxation Treaty A DTT between Mozambique and South Africa has been signed but not yet ratified by the two parliaments. This will have significant effects on investors’ choice of the optimum investment structure.
Value Added Tax
Main aspects of Mozambique VAT – VAT is levied on the supply of goods or services, carried out in the national territory by a taxpayer acting as such and, in any case, on the importation of goods – Mozambique’s VAT rate is 17% – VAT incurred should not be a cost for VAT registered entities, except in a limited number of cases, prescribed by law, in which VAT is not deductible (e.g. Banking and insurance)
Value Added Tax Exemptions
The Mozambican VAT code establishes two types of exemptions:
Single exemptions - In this case the taxpayer, when carrying out operations does not charge VAT to the purchaser. This taxpayer is also not allowed to deduct input VAT.
Complete exemptions (zero-rated) - In this case the taxpayer, when carrying out operations, does not charge VAT to the purchaser but is allowed to deduct input VAT. The exports (like transactions and international transport) benefit from a complete exemption.