Mozambique Tax Regime

Mozambique operates a worldwide corporate income tax system for resident entities, combined with source-based taxation of non-residents and a distinctive autonomous taxation regime that penalises undocumented and confidential expenditure. Resident companies and Mozambican permanent establishments of foreign companies are taxed on accounting profit adjusted for tax rules at a flat rate of 32%, one of the higher headline corporate rates in the Southern African region, while non-resident entities without a local permanent establishment are generally taxed through final withholding on Mozambican-source gross income. The regime is administered by the Autoridade Tributária de Moçambique (AT) and continues to be shaped by the country's resource-driven economy, with specific fiscal regimes for mining and hydrocarbons operating alongside the general Corporate Income Tax Code (Código do IRPC).

1.1 Sources

Primary legislation includes the Corporate Income Tax Code (Código do Imposto sobre o Rendimento das Pessoas Colectivas, IRPC), the Personal Income Tax Code (Código do Imposto sobre o Rendimento das Pessoas Singulares, IRPS), the VAT Code (Código do Imposto sobre o Valor Acrescentado), the General Tax Law (Lei Geral Tributária) and specific mining and petroleum tax legislation.

1.2 Recent developments

Mozambique has maintained its 32% corporate income tax rate while continuing to refine the autonomous taxation regime that separately taxes confidential, illicit or undocumented expenses at 35% regardless of overall profitability, producing an effective rate on such spending of up to roughly 67% once the non-deductibility of the underlying expense for ordinary IRPC purposes is taken into account. The CIT Code has been updated to define digital goods and services explicitly, subjecting non-resident providers of such services to a 10% withholding tax on Mozambican-source receipts. Effective 1 January 2026, the autonomous taxation regime was further extended to capture capital gains realised in specified circumstances, reflecting the tax administration's continued focus on base-protection measures alongside the standard rate structure.

Headline statutory corporate income tax rate for a resident company. Where sub-national (state, provincial, cantonal or municipal) corporate taxes apply, the combined rate reported by the OECD is shown. Projected 2026–2028 rates carry the current rate forward unless a change is already enacted or officially scheduled. As-of 2026.

Top marginal statutory personal income tax rate on employment income for a resident individual. Where sub-national (state, provincial, cantonal or municipal) income taxes are a standard part of the system, the combined top rate is shown. Projected 2026–2028 rates carry the current rate forward unless a change is already enacted or officially scheduled. As-of 2026.

2.1 Rates and residence

Resident entities are subject to corporate income tax (IRPC) on their worldwide income at a flat rate of 32%, levied on taxable profit defined as accounting profit adjusted to comply with tax law rules. Non-resident entities with a permanent establishment in Mozambique are taxed at the same 32% rate on income attributable to the permanent establishment, including Mozambican-source income from activities of the same or a similar kind as those carried on through the PE. Non-resident entities without a Mozambican permanent establishment, or whose income is not attributable to one, are subject to tax only on Mozambican-source income, generally collected through a final and definitive withholding tax of 20%, or 10% for certain categories of income including digital goods and services.

Certain transactions, notably capital gains realised by non-residents on Mozambican assets, require the non-resident to register as a taxpayer, appoint a local tax representative, file a return and subject the gain to IRPC at the standard 32% rate rather than final withholding, reflecting the specific-source rules applicable to gains on Mozambican real estate, mining and petroleum rights, and shares in Mozambican companies.

2.2 Dividends and participation exemption

Mozambique does not operate a broad domestic or international participation exemption of the type found in many European jurisdictions. Dividends distributed by Mozambican resident companies are generally subject to withholding tax at source, with resident corporate recipients able to credit the withholding against their overall IRPC liability where the dividend is included in taxable profit, subject to specific relief mechanisms designed to mitigate cascading taxation within resident corporate chains. Dividends paid to non-resident shareholders are subject to the standard non-resident withholding tax described in section 4, subject to any applicable treaty reduction.

2.3 Income determination and deductions

Taxable profit is based on the accounting result under Mozambican financial reporting rules, adjusted for tax-specific add-backs and exclusions. Business expenses are deductible where properly documented, incurred for the purposes of the business and supported by a valid invoice; confidential, illicit or inadequately documented expenses are not deductible for IRPC purposes and are additionally subject to the 35% autonomous taxation charge described in section 1.2, producing a materially higher effective cost than ordinary non-deductibility alone. Depreciation follows rates prescribed by regulation for defined asset categories, generally on a straight-line basis, with accelerated rates available for certain qualifying investments.

2.4 Interest limitation

Interest paid to related parties must satisfy arm's-length pricing requirements under the transfer-pricing rules described in section 2.8, and thin-capitalisation-style scrutiny applies to excessive related-party debt relative to equity. Interest deductibility more generally requires the underlying financing to relate to the generation of taxable income, and the tax administration applies substance-based review to intra-group financing arrangements, particularly where funds are on-lent from low-tax jurisdictions or routed through treaty-favourable intermediaries.

2.5 Losses

Tax losses may generally be carried forward for a limited number of years under the IRPC Code, subject to conditions preserving continuity of ownership and business activity; there is no loss carryback. Specific anti-abuse provisions restrict the use of carried-forward losses where there has been a substantial change in the ownership or activity of the loss-making entity, consistent with the tax administration's broader base-protection posture.

2.6 Group taxation

Mozambique does not operate a formal fiscal consolidation or group-relief regime; each Mozambican entity is assessed to IRPC on a stand-alone basis regardless of common group ownership. Intra-group transactions, including management fees, royalties and financing, are subject to the same arm's-length and documentation requirements as third-party dealings, and losses of one group member cannot be offset against the profits of another Mozambican affiliate.

2.7 Controlled foreign companies

Mozambique does not maintain a comprehensive controlled foreign company attribution regime comparable to those found in OECD BEPS-aligned jurisdictions. Passive income accumulated in foreign subsidiaries of Mozambican groups is not automatically attributed to the Mozambican parent under current law; taxation generally arises only when profits are actually distributed to the Mozambican resident, or where Mozambican-source income of the foreign entity itself falls within the territorial charge. Multinational groups should nonetheless monitor evolving anti-avoidance practice given the tax administration's active base-protection agenda.

2.8 Transfer pricing

Mozambique applies transfer-pricing rules requiring related-party transactions, whether domestic or cross-border, to be conducted on an arm's-length basis, informed by OECD methodology. Taxpayers meeting statutory revenue or related-party transaction thresholds must prepare contemporaneous transfer-pricing documentation and file an annual transfer-pricing return, with specific attention paid by the tax administration to the extractive and resource sectors given their prominence in the Mozambican economy. Penalties apply for non-compliance with documentation and filing obligations, and adjustments can give rise to corresponding secondary adjustments treated as deemed distributions in some circumstances.

2.9 Incentives

Mozambique's Code of Fiscal Benefits (Código de Benefícios Fiscais) provides investment incentives including accelerated depreciation, investment tax credits and reduced IRPC rates or exemptions for projects in priority sectors and less-developed provinces, subject to approval and minimum investment thresholds under the Investment Law. Special fiscal regimes apply to mining and petroleum operations, including specific royalty, production-sharing and surface-tax rules that sit alongside, rather than replace, the general IRPC charge on mining and petroleum company profits. Industrial free zones and special economic zones offer further customs and tax relief for qualifying export-oriented investment.

2.10 Pillar Two

Mozambique has not enacted Pillar Two legislation and does not currently apply an income inclusion rule, undertaxed profits rule or qualified domestic minimum top-up tax. Large multinational groups with Mozambican operations, particularly in the resource sector where the incentive regimes in section 2.9 can produce effective rates below 15%, should monitor the interaction between Mozambican incentives and top-up taxation that may be imposed by Pillar Two jurisdictions in which other group entities are located, since foreign top-up charges can effectively claw back the benefit of Mozambican tax incentives at the level of the ultimate parent.

2.11 Branch income and reorganisations

A Mozambican branch (permanent establishment) of a foreign company is taxed at the standard 32% rate on profits attributable to the branch, computed on the same worldwide-for-residents, source-for-non-residents basis applicable to the PE's activities; there is no separate branch profits or remittance tax beyond the withholding that may apply to specific payments made by the branch to its head office. Corporate reorganisations such as mergers, demergers and conversions are governed by commercial and tax law that generally requires case-by-case analysis of asset transfers and potential capital gains recognition, with limited codified tax-neutral relief compared with more developed reorganisation regimes, so cross-border restructurings involving Mozambican entities typically require specific advance analysis of the gain and withholding consequences.

3.1 Residence and rates

Resident individuals are taxed on worldwide income under the Personal Income Tax Code (IRPS); non-residents are taxed on Mozambican-source income only. Residence is generally established through physical presence for more than 180 days in a 12-month period, or through having a habitual abode in Mozambique on 31 December of the relevant year. Employment, business, professional and other categories of income are taxed under a progressive schedule with several income categories; for 2026 the schedule runs from an exempt threshold through intermediate progressive rates up to a top marginal rate in the region of 32%, broadly aligned with the corporate rate, with bracket thresholds set by regulation.

3.2 Capital income and real estate

Capital gains realised by individuals on Mozambican assets, including real estate, shares and mining or petroleum rights, are generally subject to IRPS under specific category rules, with gains on immovable property and certain financial assets often subject to specific withholding or self-assessment mechanisms. Dividends and interest paid to resident individuals are generally subject to withholding tax at source, which may be final depending on the category of income and the recipient's overall filing position. Rental income earned by individuals is taxable under the relevant income category, with allowable deductions for property-related costs.

3.3 Social security and payroll

Employers and employees contribute to the National Social Security Institute (Instituto Nacional de Segurança Social, INSS), with contribution rates applied to gross salary and split between employer and employee, the employer bearing the larger share. Employers withhold IRPS monthly from employee salaries under the progressive schedule, with reconciliation through annual filing for individuals with multiple income sources, significant deductions, or income not fully covered by payroll withholding. Statutory minimum wage levels differ by economic sector and are updated periodically by government decree.

3.4 Inbound individuals

Mozambique does not levy a general net wealth tax, and inheritance and gift taxation is limited, generally captured (if at all) through registration and notarial fees on the transfer of specific assets such as real estate rather than a dedicated inheritance tax. There is no broad preferential expatriate tax regime; foreign employees and assignees working in Mozambique are generally taxed under the same IRPS rules as Mozambican nationals on Mozambican-source employment income, subject to relief under Mozambique's double-tax treaty network, which is more developed with Portuguese-speaking and regional partner countries than with other jurisdictions.

Mozambique applies a final and definitive withholding tax of 20% on most categories of Mozambican-source income paid to non-resident entities without a local permanent establishment, with a reduced 10% rate applying to specified categories of income including digital goods and services following the recent CIT Code amendments. Domestic dividend, interest and royalty payments to residents are also generally subject to withholding, which is typically creditable against the recipient's final IRPC or IRPS liability rather than final in nature for residents. Mozambique's double-tax treaty network, concentrated among Portuguese-speaking and Southern African regional partners together with a number of European treaty partners, can reduce these rates, and taxpayers should confirm treaty status and any procedural requirements (such as residence certification) before applying a reduced rate at source.

Relief at source under a treaty generally requires the non-resident recipient to provide a certificate of tax residence and comply with Mozambican procedural formalities; absent timely documentation, the payer must withhold at the full domestic rate, with refund claims available afterwards in principle but often slow in practice. Mozambican payers remain liable for correctly assessing and remitting withholding tax and face joint liability, penalties and interest for under-withholding.

5.1 General anti-abuse and substance

The General Tax Law empowers the Autoridade Tributária to disregard or recharacterise transactions and structures that lack economic substance or are designed principally to obtain an undue tax advantage, applying a substance-over-form standard consistent with regional and international anti-avoidance norms. The transfer-pricing rules in section 2.8 and the autonomous taxation regime in sections 1.2 and 2.3 operate together as significant base-protection tools, with the latter imposing a direct tax cost on expenditure that cannot be adequately substantiated regardless of its ultimate commercial purpose.

5.2 Exchange of information and disclosure

Mozambique participates in international and regional exchange-of-information arrangements and has been expanding its administrative capacity to receive and use third-party financial and transactional data in audit selection, particularly in the extractive sector given its fiscal significance. There is no domestic mandatory disclosure regime comparable to the EU's DAC6, but cross-border arrangements involving treaty-shopping or profit-shifting features attract close scrutiny, especially where mining, petroleum or large infrastructure financing structures are involved.

6.1 VAT

Value-added tax is levied at a standard rate of 16%, with a reduced basket of exemptions covering specified basic foodstuffs, certain medicines, books and educational materials, and exports generally zero-rated. Registered taxpayers charge VAT on taxable supplies and recover input VAT incurred on purchases used for taxable activity, filing monthly returns and settling net VAT due within the statutory deadline. Imports are subject to VAT at the border in addition to customs duties, and specific VAT suspension or exemption regimes apply to qualifying capital goods imported for mining, petroleum and major investment projects under the Investment Law.

6.2 Transaction, payroll and other taxes

Real property transactions attract a municipal property transfer tax (SISA) payable on the higher of the transaction price or the assessed value, together with registration and notarial fees. Employers bear payroll-related INSS social security contributions described in section 3.3. Excise duties apply to fuel, alcohol, tobacco and certain luxury and vehicle imports, and the mining and petroleum sectors are subject to specific production taxes, surface fees and royalties layered on top of the general IRPC charge. There is no general net wealth tax on individuals or companies.

7.1 Filing, assessment and audit

The tax year is generally the calendar year, though companies may in limited circumstances adopt a different accounting period subject to authorisation. Corporate income tax returns and the final balance of tax due are filed and settled within the statutory deadline following the tax year-end, with mandatory advance and special payments on account made during the year based on the prior year's assessed tax. The Autoridade Tributária de Moçambique administers assessment and audit on a risk-based approach, with particular focus on the extractive sector, transfer pricing, and the documentation underlying deductible expenses given the autonomous taxation exposure on undocumented spending. Statutory limitation periods apply to assessments, subject to extension for fraud or non-filing.

7.2 Rulings, appeals and penalties

Taxpayers may request binding rulings from the tax administration on the interpretation of specific provisions, and assessments may be challenged first through administrative objection before the Autoridade Tributária and subsequently before the Administrative and Tax Courts, with the possibility of further appeal on points of law. Penalties for late filing, late payment, under-reporting and inadequate documentation are set under the General Tax Law and related regulations and can be significant, particularly where the autonomous taxation regime is triggered; interest accrues on unpaid tax from the original due date, and voluntary regularisation before an audit commences generally attracts reduced penalties.

Late settlement of any of the above attracts statutory interest and penalties from the original due date, and the mining and petroleum sectors carry additional royalty and production-tax payment schedules tied to extraction and export volumes rather than the standard fiscal-year calendar. Investors under the Code of Fiscal Benefits retain separate reporting obligations to the investment promotion authorities in addition to standard tax filings.

9.1 Entity choice

The Sociedade Anónima (S.A.) and the Sociedade por Quotas (Lda.) are the principal vehicles for foreign investment, with the Lda. commonly used for wholly-owned subsidiaries given its simpler governance requirements and the S.A. preferred for larger or capital-market-oriented ventures. Branches of foreign companies are permitted and taxed on attributable Mozambican profits at the standard 32% rate, but branch registration and capital-repatriation formalities lead many investors to prefer a locally incorporated subsidiary, particularly outside the extractive sector where branch structures remain common for large resource projects.

9.2 Structuring and incentives

Given the absence of group relief and CFC rules, Mozambican operations are generally structured and optimised on a stand-alone entity basis, with groups directing qualifying investment into priority sectors or less-developed provinces to access the accelerated depreciation, investment tax credits and reduced rates available under the Code of Fiscal Benefits. Related-party financing and service arrangements should be priced and documented defensively given active transfer-pricing enforcement, and businesses should maintain robust documentation for all material expenditure given the severe 35% autonomous taxation exposure on confidential or undocumented costs, which can apply even where the underlying company reports an overall tax loss.

9.3 Worked effective-rate illustration

A Mozambican trading subsidiary earns taxable profit of MZN 40,000,000 after deducting properly documented and supported operating expenses. Corporate income tax at 32% is MZN 12,800,000. During the year the company also incurred MZN 2,000,000 of expenditure that could not be adequately documented; this amount is both disallowed as a deduction in arriving at the MZN 40,000,000 taxable profit figure above and separately subject to autonomous taxation at 35%, i.e. a further MZN 700,000. The total tax charge is 12,800,000 + 700,000 = MZN 13,500,000. Expressed against the MZN 40,000,000 taxable profit base, this is an effective rate of 13,500,000 / 40,000,000 = 33.75%, illustrating how even a modest amount of undocumented expenditure pushes the effective rate meaningfully above the 32% headline CIT rate.

9.4 Compliance

Expect monthly VAT and payroll compliance, instalment-based corporate income tax payments on account, annual CIT and autonomous taxation self-assessment, transfer-pricing documentation and annual filing above the applicable thresholds, and sector-specific royalty and production-tax reporting for mining and petroleum operations. Rigorous expense documentation practices are essential given the autonomous taxation exposure, and investors relying on Code of Fiscal Benefits incentives must maintain the investment and compliance records required to defend the preferential treatment on audit.