Tax Figures
Corporate Income Tax
The current corporate income tax rate is 32%.
The Mozambican tax year is the calendar year. Companies must submit their tax returns by 31 May each year, with supporting documents filed by the end of June.
Companies must make three provisional payments of corporate tax: May, July and September. The total amount of the payment should be 80% of the result of the tax assessed, less the amount of tax withheld by third parties in he previous year. Other special provisional corporate tax payments may be due in June, August and October if the result of the following formula is positive: 0.5% x turnover (with a minimum limit of MZN 30,000 and a maximum limit of MZN 100,000), less the provisional payment made in the previous year.
Income Tax Rate
- 0 – MZN 42,000: 10%
- MZN 42,001 – 168,000: 15%
- MZN 168,001 – 504,000: 20%
- MZN 504,001 – 1,512,000: 25%
- Above MZN 1,512,001: 32%
Payroll Tax
No
Sales Tax
VAT is imposed on the supply of taxable goods and services as well as imports in Mozambique. Taxable persons charge VAT on their taxable supplies (output tax) and are charged with VAT on goods which they receive (input tax).
The current standard rate of VAT imposed on taxable goods and services is 17%, with reduced rates available for certain items (0%).
Banking, financial and certain health, education and philanthropic services are exempt. Services related to drilling, research and construction of infrastructure in the context of mining and oil activities during the exploration phase and the export of goods and services are zero- rated.
Withholding Tax
Mozambique imposes withholding taxes (WHT) on payments made to both resident and non-residents on certain classes of income earned:
- Dividends: 20% (10% for stocks listed on the Mozambique Stock Exchange)
- Royalties: 20%
- Interest: 20%/0%
- Technical services: 20%
Payments made to nonresidents for the following services are subject also subject to a 10% withholding tax: (1) telecommunications services, international transport services and the assembly and installation of telecommunications equipment; (2) services related to construction and rehabilitation of productive infrastructures, transport and distribution of electricity in rural areas, under the scope of public projects of rural electrification; (3) services from charters of marine vessels to conduct fishing and cabotage activities; and (4) services relating to the maintenance of freight aircraft.
Other Tax
Property transfer tax: 2%
Time to prepare and Pay Taxes
200 hours
Employers Social Security and statutory contributions
Employers are required to contribute 4% of the employee’s gross monthly remuneration.
Employees Social Security and statutory contributions
Employees are required to contribute 3% of the employee’s gross monthly remuneration.
Payroll
Foreign companies operating in Mozambique may find it challenging to deal with the complexities of the country’s tax system. The primary concerns for a foreign company that needs to comply with tax laws in Mozambique are: Individual income tax (IIT) for employees in Mozambique, social security costs, VAT, withholding tax, business tax and permanent establishment concerns.
Remote Payroll
A remote payroll in Mozambique is where a foreign company, i.e. a non-resident company, payrolls a resident employee in Mozambique. This applies to both local and foreign employees. One option for a non-resident company to payroll its employees (local and foreign) in Mozambique is to use a fully outsourced service like a GEO or PEO which will employ and payroll the staff on their behalf.
Local Payroll Administration
In some cases, a company will register their business in Mozambique under one of the forms available but prefer to have another company administer its payroll. This can be accomplished through a payroll provider. It is important to note that the company, as the Employer of Record, is still fully responsible for compliance with employment, immigration, tax and payroll regulations. But the payroll calculations, payments and filings can all be outsourced to the payroll provider.
Internal Payroll
Larger companies with a commitment to Mozambique may wish to run their own local payroll for all employees, foreign and local. In order to accomplish this, they will have to complete the incorporation, register the business and then hire the necessary staff. There will be a need for in country human resources personnel who have the background needed to manage a Mozambican payroll and can fulfil all tax, withholding tax and payroll requirements.
Currency
Metical, MZN
