Corporate tax information for Mozambique (MZ) is outlined below for 2025, covering the core tax rate applied to companies, the types of taxation in force, and additional surtaxes relevant to specific business situations. The overview uses official data and the Mozambican Metical (MZN) as the reference currency.
Corporate Tax System Overview in Mozambique
Mozambique employs a flat corporate tax regime for domestic companies. The tax is assessed on corporate income, and a standard rate applies across most taxable profits. Special surcharges exist for non-compliance and for certain transactions involving non-resident entities. Below is a summary table of the main tax rates and specific conditions in effect as of 2025.
Corporate Tax Rates in Detail (2025)
| Description | Rate (%) | Currency Code | Relevant Conditions |
|---|---|---|---|
| Main Corporate Income Tax Rate | 32% | MZN | Applied to profits of Mozambican resident companies |
| Autonomous Taxation on Confidential/Illicit Expenses | 35% | MZN | Expenses without proper documentation or related to illicit/confidential transactions |
| Final Withholding Tax for Non-Residents (general) | 20% | MZN | Non-resident entities without a permanent establishment (PE), on gross income unless income is attributed to a local PE |
| Final Withholding Tax for Non-Residents (specific income types) | 10% | MZN | Select sectors: telecoms, international transport, rural electrical infrastructure, vessel freight for fishing/coasting, services to local agricultural companies (until end of 2025) |
Key Features of Mozambique’s Corporate Tax Regime
Corporate tax rate: The standard rate is 32%, applicable to all corporate profits for resident companies as the basic regime.
Flat tax structure: Mozambique’s system is not progressive—there are no increasing bands or brackets for different profit levels. The same rate applies to all corporate profits unless specifically surcharged as noted below.
Surtaxes and Withholding: Higher rates (up to 35%) can apply to certain types of expenditures and situations, particularly:
- Expenses listed as confidential, illicit, or lacking proper supporting documents may attract a 35% tax via autonomous taxation mechanisms.
- Non-resident entities without a permanent establishment face a 20% final and definitive withholding tax on gross income (unless the income is attributable to a Mozambican establishment).
- Certain categories of income paid to non-resident entities are taxed at 10%, especially for specific sectors (telecom, international transport, targeted rural infrastructure, specific freight and agricultural services) until the end of 2025.
No standard tax brackets or holding period requirements apply under the current scheme. The structure is relatively straightforward but includes vigilance on documentation and compliance to avoid punitive rates on ineligible expenses.
Special Considerations for Non-Residents and Sectoral Activities
Non-resident companies are taxed predominantly through withholding mechanisms rather than standard corporate tax filing. The final withholding tax rates vary based on the nature of the income and whether a permanent establishment exists inside Mozambique. Sectors such as telecommunications, transportation, and energy infrastructure benefit from reduced WHT rates for defined activities—these incentives are scheduled to remain until the end of 2025.
Reference Currency and Conversion
All rates referenced are in MZN (Mozambican Metical). For international comparison, as of early 2025, the estimated exchange rate is 1 USD ≈ 63 MZN. (For example, a taxable profit of MZN 1,000,000 would be approximately USD 15,870 before tax.)
Pro Tips for Navigating Mozambique’s Corporate Tax
- Maintain Complete Documentation: Ensure that all expenses are fully documented and justified. Inadequate paperwork could subject expenditures to the punitive 35% autonomous tax rate.
- Clarify Entity Status for Withholding Tax: If operating without a permanent establishment in Mozambique, confirm the correct withholding rate (20% or 10%) with local advisors for each transaction.
- Monitor Sector-Specific Incentives: If your business operates in qualifying sectors, verify eligibility for the reduced 10% withholding tax and note the scheduled expiration at year-end 2025.
- Review Local Compliance Timelines: Mozambique enforces strict reporting deadlines. Adhering to required submission periods is essential to avoid penalties and additional taxation.
- Stay Updated on Regulatory Changes: The tax authority may revise incentives or applicable rates. Regularly review official updates from the Ministry of Economy and Finance (https://www.mef.gov.mz/).
Core Takeaways on Mozambique Corporate Taxation
The Mozambican corporate tax system in 2025 is characterized by a flat standard rate of 32%, straightforward application, and strict compliance requirements on documentation. Surtaxes on undocumented or non-compliant expenses can result in significantly higher tax burdens, especially for cross-border activities and non-resident entities. For those operating in favored sectors with international transactions, reduced withholding tax rates may offer a practical advantage but are subject to expiration and ongoing regulatory adjustment. Always prioritize documentation and clarity of entity status to manage rates effectively in Mozambique’s evolving tax environment.