Mozambique has amended its Corporate Income Tax Code, creating new reduced rates for certain businesses, according to official legal database Legis-PALOP+TL.
According to Law n.º 20/2022, of December 30, which amends the Corporate Income Tax Code, and came into force on January 1, the general corporate income tax rate (IRPC) remains at 32%, with the following exceptions:
⦁ Agricultural, livestock, aquaculture and urban transport activities will now benefit, until December 31, 2025, from a reduced IRPC rate of 10%.
⦁ Charges that are not duly documented and expenses of a confidential or illegal nature are taxed autonomously at the rate of 35%, without prejudice to such charges being considered non-deductible for tax purposes.
Income subject to withholding tax obtained in Mozambican territory remains taxed at 20%, with the following exceptions applicable until December 31, 2025:
⦁ In the case of income from entities that do not have headquarters or effective management in Mozambican territory and do not have a permanent establishment in the Republic of Mozambique, and which are imputable, income derived from interest from external financing destined for agricultural projects is exempt;
⦁ Income from the provision of services by non-resident entities to Mozambican agricultural companies is taxed at a withholding rate of 10%.
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Still taxed at the withholding rate of 10% is income from entities that do not have headquarters or effective management in Mozambican territory and do not have a permanent establishment in the Republic of Mozambique, and which are attributable, if derived from:
⦁ Provision of telecommunications and international transport services, as well as assembly and installation of equipment related to these services, and those relating to aircraft maintenance and freight;
⦁ Provision of construction and rehabilitation services and infrastructure for the production, transport and distribution of electricity in rural areas, within the scope of public rural electrification projects;
⦁ Chartering of maritime vessels to carry out fishing and cabotage activities;
⦁ Securities listed on the Mozambique Stock Exchange, except interest on treasury bills and debt securities listed on the stock exchange, which are subject to a 20% withholding tax.
