Mozambique

Rates and scope

The Mozambique standard VAT rate is 16%. Certain goods or services are charged at 0%. However, there are cases where VAT is not due on the full price, leading to lower effective rates, namely:

• public works for the construction or rehabilitation of roads and bridges, and water or power infrastructures for supplies to rural areas — due on 40% of the taxable basis

• power (price is established by authorities) — 62%

• services of which the price is determined based on aeronautic excises — 85%

• water (price is established by authorities) — 75%.

A reduced rate of 5% has been introduced and is only applicable to the following operations:

• the supplies of medical and health services and closely related operations carried out by private hospitals, clinics, dispensaries and similar

• the provision of teaching services, as well as the transmission of goods and related supplies of services, when these are carried out by private establishments integrated in the National Education System and recognised by the Ministry of Education

• the provision of vocational training services as well as the transfer of goods and the provision of related services, such as the supply of accommodation, food and teaching materials, when these are carried out by private entities

• the provision of services consisting of private lessons taught on school or higher education subjects.

VAT registration

VAT is levied on the following:

• Supply of goods — i.e. the transfer of the right to dispose of tangible property as owner, which includes commercial transactions, hire purchase, sale in instalments with reservation of ownership, commission, consignment, and application of goods forming part of a business for private use or for non-business purposes when tax has been deducted on such goods, use of goods on which tax has been deducted for a purpose or in a sector where right of deduction is excluded

• Supply of services — as a residual concept it includes all the operations carried out that are not a supply of goods or an importation, including the supply of free services provided by the company in view of the personal needs of the company or of its staff, or to purposes not related to the company, and the personal use of a company’s goods as well as its use for purposes not related to the company and in exempt sectors of activity when input tax has been deducted on such goods

• Importation of goods, being the entry of goods into the territory of the country.

The following persons are liable for the payment of VAT:

• any person carrying on an economic activity on an independent and regular basis

• any person carrying on an operation on an occasional basis

• non-residents carrying on operations

• importers (whether or not they are entrepreneurs)

• any person who unduly charges VAT on an invoice

• the state, except if those activities are not carried out in a significant manner (including telecommunications, water, gas and electricity distribution, transport, ports and airports, TV and radio, etc.).

Compulsory registration

Voluntary registration

Group or branch registration

Companies in the same group (holding company and subsidiaries) cannot apply for one registration for the whole group, as each company must be registered separately.

Companies or branches of foreign entities only register for tax once — if they open additional offices within the country it is under the same registration. Each foreign entity registering as a branch is specifically registered for VAT.

Non-residents

Non-resident entities without a permanent establishment in Mozambique that carry out transactions in the national territory should appoint a resident tax representative to comply with the respective VAT obligations.

The appointment of the tax representative is made through a Power of Attorney in which the non-resident company grants the tax representative power to comply, on its behalf, with VAT obligations in Mozambique.

The tax representative should then obtain a Tax Representative Number (NUIT) for the non-resident company and declare the commencement of activities by completing the following tax forms M/01C and M/02 respectively.

The legal representative and the non-resident entity are severally liable to the tax authorities.

Should the non-resident entity fail to appoint a tax representative in Mozambique, the purchaser of the goods or the recipient of the services must comply with the VAT obligations.

Application for registration

Tax registration is done by completing and submitting to the tax authorities form M/01C — ‘Declaration of registration of companies’ to obtain a NUIT and form M/02 — ‘Declaration of commencement of activity for tax purposes’. The forms must be submitted 15 days prior to the commencement of tax activities.

The Tax Registration Number normally comprises nine or ten numerals and is called NUIT (Número Único de Identificação Tributária). It is also the tax number for all taxes (direct and indirect).

Deregistration

Output tax

Single exemptions

In these types of exemptions, the taxpayer, when carrying on operations, does not charge VAT to the purchaser. This taxpayer is also not allowed to deduct input tax.

Single exemptions are applied, amongst others, to transmission or supplies of the following goods and services:

• medical and sanitary services and strictly connected operations, carried out by public hospitals, dispensaries and other similar establishments

• wheelchairs and similar mobility aids for disabled people and any prosthetic or compensation material intended for substitution of any limb or organ of the human body, or intended for treatment of fractures, as well as those intended to be used by blind people or for hearing deficiency correction

• human organs, blood and human/breast milk

• transport of sick or wounded people in ambulances by duly authorised entities

• mosquito nets

• medicines, including those intended for veterinary purposes, pharmaceutical specialties and other pharmaceutical products intended exclusively for therapeutic and prophylactic use, as well as plasters, bandages, cotton, cotton wool, adhesive bands and other similar products

• goods and services related to social assistance, provided by public entities or non-profit organisations

• services and strictly connected goods, supplied by nurseries, kindergartens, centres of leisure, establishments for abandoned children and youth, homes for the aged and invalids, establishments for children and youth with disabilities, rehabilitation centres and other similar establishments pertaining to public entities or non-profit organisations

• services supplied by public entities or non-profit organisations engaged in the pursuit of sports, culture and physical training activities

• services supplied by guides on visits to museums, parks or other places belonging to the state or other non-profit entities (and the supply of strictly connected goods)

• services and related goods supplied by public entities or non-profit entities in respect of congresses, conferences, seminars or similar activities of a scientific, cultural, educational or technical nature

• the provision of teaching services, as well as the transmission of goods and related supplies of services, when these are carried out by public establishments integrated in the National Education System and recognised by the Ministry of Education

• professional training services and related goods, including accommodation, food and tutorial material, supplied by public entities

• intellectual property rights and the authorisation to use intellectual property by the respective authors or heirs

• newspapers, magazines and books considered to be of a cultural, educational or technical nature

• supply of staff by religious or philosophical entities for the execution of exempt activities under the terms of the vat code or for purposes of spiritual assistance

• services supplied by non-profit entities in the collective interest of its members, provided that the consideration given by the members is only a fixed fee in terms of the entities’ articles of association

• goods and services supplied by exempt entities, related to occasional events for fund raising to a maximum of eight events per year

• sealing values

• waste removal when performed or contracted by public entities 

• funeral and cremation services and the supply of accessory goods, when performed by public entities

• banking and financial operations, subject to stamp duty

• insurance and reinsurance operations, subject to stamp duty

• lease of immovable property for residential purposes 

• operations subject to property transfer tax (SISA)

• the playing and practice of certain games of luck and forms of social entertainment

• goods allocated exclusively to an exempt sector of activity or that do not entitle one to a right of deduction

• goods and services pertaining to forestry, cattle and fishing activities

• certain equipment, seeds, fertilisers and fungicides, as well as fishing nets, hooks and other tools for fishing.

The following exemptions are valid until 31 December 2023:

• alimentary oil and soaps

• acquisition of sugar

• acquisition of raw material, intermediary products, spares, equipment and components made by the national sugar industry 

• acquisition of goods to be used as raw material in the alimentary oil and soap industries

• acquisition of goods and supply of services related to agricultural activity of the production of sugar cane and destined for the industry.

On the other hand, the transmissions of inputs of solar panels for rural electrification, listed in the Customs Tariff and detailed in Annex IV, which is an integral part of the VAT Code, are exempt from VAT until 31 December 2025.

Complete exemptions (zero-rated supplies)

In these types of exemptions, the taxpayer does not charge VAT to the purchaser but is allowed to deduct input tax.

The following transactions are fully exempt from VAT:

• exports (international transport)

• supply of goods and services pertaining to agricultural (including poultry and beekeeping services)

• supplies of maize, maize flour, rice, bread, iodised salt, powdered milk for infants up to one year, wheat, wheat flour, fresh or refrigerated tomatoes, onions, frozen horse mackerel (carapau), lighting petrol, jet fuel, mosquito nets, common and iron bicycles up to 4 speeds, condoms and insecticide 

• some products resulting from the industrial activity of producing feed for animals meant for human consumption

• transmission of goods to be used as raw material in the alimentary oil and soap industry, resulting from the industrial activity of the production of alimentary oil and soap, carried out by the relevant factory

• transmission of goods and supply of services related to the agricultural activity of the production of sugar cane and destined for the industry.

Input tax

Input tax allowed

VAT is fully recoverable, subject to complying with the legal requirements, in the case of taxpayers carrying out fully taxable activities.

Taxpayers carrying out VAT-exempt activities (single exemptions) are not entitled to claim any input tax. Mixed taxpayers will have to use an apportionment method to determine a percentage of deductible VAT.

International trade

Input tax expressly denied

Input tax recovery is expressly denied on VAT on the following expenses:

• passenger or passenger/goods vehicles, pleasure boats, helicopters, aircraft and motorcycles

• fuel used for cars, except for diesel fuel, where 50% of the tax is deductible. however, diesel is fully deductible if related to tractors used for agricultural purposes, certain machines, and large vehicles licensed for the transportation of people or goods, excluding those used in the car rental sector

• expenses on business trips and transport for entrepreneurs or employees

• lodging, food and drink, tobacco and entertainment expenditure

• telephone communication costs, except those related to fixed telephones in the name of the company

• diversion and luxury expenses

• expenses subject to a reduced rate of 5% are excluded from the right to deduct.

Partial exemption

Adjustments

The use or allocation of goods that are part of a business for private use or for non-business purposes is considered as a supply of services when VAT has been deducted on such goods. Therefore, the taxpayer must pay VAT to the tax authority.

Preregistration and post-deregistration VAT

Imports

Goods

VAT is payable by any importer on the importation of goods. However, importation of the following goods is exempt from VAT:

• goods that are exempt when sold within the country

• certain goods that are duty exempt or declared subject to suspension procedures

• importation of gold by the Bank of Mozambique

• reimportation of goods by the entity that exported the goods, when they are exempt from import duties

• ships and aircraft used in international trade, and goods for provisioning and fuelling thereof

• importation of art objects by the respective artists, authors, heirs or legatees

• certain other exemptions and reductions recognised by the minister of economy and finance

• goods in category ‘K’ of the customs tariff schedule.

Services

The general rule is that any performance of services is taxable if the service provider’s headquarters, permanent establishment, or domicile from which the services are rendered, are in Mozambique.

However, the performance of the following services is always taxable, regardless of whether the service provider has its headquarters, permanent establishment or domicile in Mozambique:

• services related to an immovable property located in Mozambique

• services performed on movable tangible goods and inspections related to them, if executed totally or essentially in Mozambique

• services of an artistic, scientific, sports, entertainment, educational or similar nature that take place in Mozambique

• transport for the distance travelled in Mozambique.

The following services are also always taxable when the customer is established or domiciled in Mozambique:

• cession of, or authorisation for use of, copyright, licences, trademarks and similar rights

• advertisement services

• telecommunication services

• services provided by consultants, engineers, lawyers, economists and accountants, as well as study offices in several areas, such as organisation, research and development

• supply of information and data

• banking, financial, insurance and reinsurance operations

• dismissing of personnel in favour of a third party

• intermediary services that intervene in the name and on behalf of a third party in the performance of services

• the obligation of not exercising, even if partially, a professional activity or a right mentioned above

• leasing and renting (including financial leasing) of movable assets

• services supplied electronically:

  • supply of websites, web-hosting and distance maintenance of programmes and equipment

  • supply of software and respective updates

  • supply of images, text and information and provision of databases

  • supply of music, films and games, including games of chance and gambling games, and of political, cultural, artistic, sporting, scientific and entertainment broadcastings and events

  • supply of distance teaching

  • other ancillary services.

In case of the aforementioned services, should the service provider not have appointed a tax representative in Mozambique, the VAT obligations must be complied with by the recipient of the services by the application of the VAT self-assessment rules. VAT self-assessment bears no cash flow impact.

Exports

Goods

Exportation of the following goods is subject to full exemption from VAT (i.e. zero-rating):

• goods shipped or transported abroad by or on behalf of the seller

• goods shipped or transported abroad by a customer without residence or establishment in Mozambique, except goods destined for the supply of ships, tourism aircraft or any other means of conveyance for private use.

The following supplies of goods are considered as operations assimilated to exports and, therefore, are exempt from VAT:

• supply of provisioning goods for vessels that carry out maritime navigation on the high seas, the remunerated transport of passengers, a commercial, industrial or fishing activity, rescuing or maritime assistance, and coastal fishing

• supply of goods under diplomatic and consular relations, in accordance with international agreements

• supply of goods to certain international entities

• supply of goods to recognised entities that export the goods abroad in the scope of their humanitarian, charitable or educational activities

• supply of goods by the Mozambican public railway entity to foreign railway companies

• supply to the Bank of Mozambique of gold ingots or other forms of gold.

Services

The following services are also considered as operations assimilated to exports and therefore subject to VAT exemption:

• supply of services related to transformation, repair, maintenance, freight and lease of vessels relating to certain activities

• supply of services related to transformation, repair, maintenance, freight and lease of aircraft used by airline companies dedicated to international traffic, and the supply of provisioning goods for the said aircraft

• supply of services under diplomatic and consular relations, in accordance with international agreements

• supply of services directly related to goods exempt from tax, being temporary imports or transits, or entered in deposits of the customs regime

• supply of services related to the shipping of goods abroad

• supply of services supplied by the Mozambican public railway entity to foreign railway companies

• supply of services related to transport of persons proceeding from or going abroad

• works on movable assets acquired or imported for purposes of such works, which are afterwards shipped or transported abroad.

Furthermore, as stated earlier, the general rule is that all performance of services is taxable, provided that the service provider has its headquarters, permanent establishment or domicile in Mozambique, from which the services are rendered. However, there are exceptions to this rule.

The supply of certain services, for instance, falls outside the scope of VAT in Mozambique when the customer is established or domiciled outside the country, even if the service provider has its headquarters, permanent establishment or domicile in Mozambique. This exception only applies to the following services:

• cession of, or authorisation for use of, copyright, licences, trademarks and similar rights

• advertising services

• telecommunication services

• services provided by consultants, engineers, lawyers, economists and accountants, as well as study offices in several areas, such as organisation, research and development

• supply of information and data

• banking, financial, insurance and reinsurance operations

• disposal of personnel in favour of a third party

• intermediary services that intervene in the name and on behalf of a third party in the performance of services

• the obligation of not performing, even if partially, a professional activity or a right mentioned above

• leasing and renting (including financial leasing) of movable assets.

• services supplied electronically:

  • supply of websites, web-hosting and distance maintenance of programmes and equipment

  • supply of software and respective updates

  • supply of images, text and information and provision of databases

  • supply of music, films and games, including games of chance and gambling games, and of political, cultural, artistic, sporting, scientific and entertainment broadcastings and events

  • supply of distance teaching

  • other ancillary services.

Refunds to foreigners

Place, time and value of supplies

Place of supply

VAT is levied on the supply of goods and services carried out in Mozambique (territoriality concept), as well as on imports.

In the case of goods, the general rule is that the taxable operation takes place where the transport to the person to whom the goods are supplied begins or where the goods are when the supply takes place (except in the case of transactions by the importer before clearance of the goods upon importation).

In the case of services or works, the general rule is that the taxable operation takes place at the place where the supplier’s business or permanent establishment from which the services are rendered, or its permanent address is situated.

However, in case of services, the following exceptions should be taken into consideration:

• services related to immovable property located outside Mozambique — place of the property

• works on movable goods executed totally or mainly outside Mozambique — place where the service takes place

• services of artistic, scientific, sports, recreational, educational and similar nature, executed outside Mozambique — place where the service takes place

• transport — where effected or distance covered.

Under the self-assessment rules, supplies of specific services (such as telecommunication, royalties, licences, trademarks, copyrights, advertising, consulting, engineering, lawyers, economists, accountants, research and development, supply of staff, lease [including financial leasing] of movable goods, services supplied electronically etc.) are taxable in Mozambique, provided the customer is a taxable person.

On the other hand, these supplies would not be taxable if the customer is a foreign entity, even if the supplier is a resident entity.

Time of supply

The time-of-supply rules determine when VAT becomes chargeable and the time from which the tax authorities may reclaim tax. These two relevant moments may not occur simultaneously when an invoice or equivalent document is issued, although the term for invoicing is counted from the taxable event.

As such, the normal rules of a taxable event are the following:

• supply of goods — when the goods are delivered to the customer

• supply of services — when the service is concluded

• imports — when the goods are cleared at customs

• supply of goods with transport — when the transport begins

• supply of goods with assembling — time of supply of continued services — at the end of each period

• self-consumption and free supplies — when they occur

• supply of goods from principal to commissionaire — when the goods are delivered to the customer

• consignment stock — when delivered to the customer or after 180 days

• delivery of goods before the transferring effect of a contract (except hire purchase and sale on instalments) — when such effects take place.

VAT becomes chargeable as follows:

• date of invoice — if the term for issuing is complied with (five working days, counting from the taxable event)

• end of term — if the term is not complied with

• Up-front invoices and advance payments — immediate chargeability of VAT.

Value of supply

In the case of goods and services, the value is the value of the consideration (including any taxes and duties other than VAT, and expenses related to commissions, packaging, transport and insurance paid on behalf of the customer).

In the case of imports, the value is the customs value, increased by customs duties and other import taxes and ancillary expenses (such as packaging, transport and insurance) up to the first destination of the goods in Mozambique.

VAT compliance

Returns and payment of VAT

The following returns must be submitted:

• return applicable to starting of activity — to be submitted to the Tax Department 15 days before starting the activity (Modelo 02)

• tax registration return — to be submitted to the Tax Department before starting with the activity (Modelo 01/C)

• monthly returns with payment — to be submitted up to the last working day of the following month (Modelo A); In case the taxpayer is in a VAT Credit position, the monthly return must be submitted by the 15th day of the following month

• amendments return — to be submitted within 15 days after the alteration of any information included in the Declaration of Start of Activity of the company (taxpayers should submit a Declaration of Alterations to the same entity)

• closedown return — to be submitted within 30 days of the relevant declaration.

The following deadline should be observed for VAT purposes:

• VAT due by taxpayers for the month must be paid to the competent Tax Department by the last working day of the following month

• VAT deductions must be made within the period corresponding to the issuance date of the invoice or equivalent document, or within the following 90 days.

Interest and penalties

The non-payment or late payment of VAT due is subject to a fine that may vary from the amount of unpaid tax to double this amount, but not exceeding (in Mozambican Metical) MZN2,5m (USD38,784 at the current exchange rate). Interest may also be applicable, should there be an amount of VAT due.

The applicable interest rate is the prime rate provided by the Mozambique Central Bank (the rate should be confirmed on the Mozambique Central Bank’s website on the date of assessment). Interest and fines would not be waived even if the non-compliance does not result in a financial loss to the state.

Refunds

Whenever there is a right to deduct VAT, the amount of deductible VAT must be offset against the amount of VAT payable on a monthly basis.

If the amount of deductible VAT exceeds the amount due, the difference will be deductible within the subsequent months. If after four months the amount of credit still exists and is higher than MZN100,000, the taxpayer may apply for the relevant refund.

Irrespective of the four-month term, the taxpayer is allowed to request the corresponding  VAT refund when:

• they cease their activities

• they start carrying on exclusively VAT-exempt operations with no right to deduction, or qualify under the exemption or under simplified regimes the amount of credit exceeds the fixed limit of MZN 500,000 and it must consider in sequential order the credits in the current year.

If after 12 months from the period in which the excess began, it maintains systematic VAT credits, the taxpayer must request, if it does not wish to do so in full, the refund of at least 50% of the accumulated VAT credit.

The deadline legally established for the tax authorities to refund VAT is 30 days. If the deadline is not met, interest will be paid on special request by the taxpayer. In practice, refunds are being paid with some delay and no interest is ever paid by the tax authorities.

Objections and appeals

Time limits

VAT records

Tax invoices

Invoices must be issued by any person or entity who carries out an economic activity on an independent and regular or occasional basis. Therefore, we understand that agents may also issue invoices.

Regardless of the process of issuance of the invoice, all wording must be in Portuguese, although the tax authorities do accept it if English is used alongside with the Portuguese wording; and the amounts must be indicated in the local currency (MZN).

An invoice will only be valid for VAT purposes if it is either printed by a local printing company that has been authorised by the Ministry of Economy and Finance, or issued using invoicing software authorised by the Ministry of Economy and Finance. VAT invoices must contain the following information:

• name, address and tax registration number (NUIT) of the supplier and customer

• date and unique sequential number

• number and type of goods supplied

• the price net of VAT

• the VAT rate (16%), the value of the VAT charged and (separately) any exempt goods, with specific indication of the legal article granting exemption

• Bank Identification Number, abbreviated as BIN (or NIB), for which state payments are made

• if the invoice is issued by an authorised printer, the name of the printer and their authorisation number and tax registration number

• if the invoice is issued using software previously authorised by the Ministry of Economy and Finance, the expression ‘Processed by Computer’.

Credit notes

Credit notes are used in the case of the cancellation or reduction of the value of a past operation, adjusting the relevant value.

Credit notes must always make reference to the invoices to which they relate.

For a credit note to be regarded as valid for VAT deduction purposes by the supplier (in cases of VAT regularisation in favour of the taxpayer), it should be stamped and signed by the acquirer of goods or recipient of services.

VAT on credit notes may or may not be included, i.e. credit notes may only adjust the operation’s value without modifying the VAT position, since in normal circumstances VAT charged by the supplier has been deducted by the customer.

Additional export documentation

Record-keeping

The following records must be kept:

• statutory accounting system — records of all operations according to their VAT treatment; original invoices received and duplicates of invoices issued

• special records when invoicing is waived (e.g. sales by retailers and traders in marketplaces; supply of services in certain circumstances)

• VAT books (for taxable persons without a statutory accounting system) — records of inventories, supplies of goods and finished products, services rendered, operations on fixed assets and inventories, by-products and consumables, as at 31 December each year.

All books, records, supporting documents and other documentation related to programming and treatment of data, when accounting is carried out through a computer system, must be kept for ten years. The accounting documentation must be kept within the country at the company’s headquarters or by its legal representative, to allow the tax authorities access to the documents when required.

As the scanning of documents is not expressly allowed, authorisation for scanning should be requested from the tax authorities.

Specific VAT rules

Bad debts

Land and buildings

Land in Mozambique is state-owned. Therefore, it is not possible to sell, transfer or give as mortgage or pledge any land. Entities are only granted the right of use of land for a predetermined period.

Operations subject to property transfer tax (SISA) are exempt from VAT. As the transfer of buildings is subject to SISA, such operations are VAT exempt.

On the other hand, the lease of immovable property is ‘single-exempted’ when intended for residential purposes. Otherwise, it is subject to VAT.

Leasing

As financial operations are exempt from VAT, leasing is exempt from VAT as long as it is subject to stamp duty

Promotional gifts

Promotional gifts and samples are not considered to be supplies of goods and are therefore not subject to VAT.

The Ministry of Economy and Finance will determine the maximum value of promotional gifts and samples that are not subject to VAT. However, no limits have been approved yet.

Secondhand goods

Second-hand goods are subject to VAT. The tax is applicable to the difference between the selling price and the purchase price (margin scheme).

Invoices issued by taxpayers engaged in selling second-hand goods must contain the wording ‘VAT — second-hand goods’. Special accounting is

required to evidence the calculation of VAT. Exports of second-hand goods are, in most cases, zero-rated.

Retailer and service provider scheme

Travel agencies and organisers of tourism circuits

Where tour operators act in their own name, VAT is chargeable on the gross margin only. The taxable amount is calculated as

[(sales with VAT less purchases with VAT) x 100] ÷ 116

Invoices issued for these operations should not disclose the VAT amount and should include the wording ‘VAT included’. Even if the VAT is shown separately on the invoice it cannot be deducted.

These operations must be accounted for in a separate record (of a special model) showing the calculation of VAT.

Transfer of a business

Transfer of a whole business or independent part thereof is excluded from VAT, provided the recipient is or will become a taxable person.

All goods not found in the place where the taxable person runs their business, as part of their inventories, and things consumed in excessive quantities will be deemed to have been transferred or sold, unless the taxpayer proves the contrary (e.g. with documentation that proves that the goods have been destroyed due to their state of deterioration, and the tax authority has been notified in time of this fact).

Other indirect taxes

Import duty

Specific consumption tax

This tax is levied on purchases of certain merchandise manufactured in Mozambique or imported. The tax rates are listed in a table and range from 5% to 75%. These rates shall be in force up to 2025.

Property transfer tax

Property transfer tax (SISA) is charged on the transmission of property rights or other minor rights over immovable property for consideration (e.g. sale and purchase, accord and satisfaction, constitution of servitudes, etc.) for property that is considered as urban tenements located in the Mozambican territory.

An ‘urban tenement’ is any building on land, with the grounds that serve it, where the source of income depends mainly on the existing structures and not on the land itself.

The obligation to pay the property transfer tax is generated at the moment that the onerous transmission of a property right or a minor right is considered to have been transmitted (including the signature of promise of sale agreements).

The current rate of property transfer tax is 2% of the transmission value. However, when the buyer is tax-resident in a country with a more favourable tax regime, the applicable rate will be 10%.

Stamp duty

Stamp duty is assessed on all documents, contracts, books, papers and deeds designated in the schedule attached to the Code. Transactions that are subject to VAT and not exempt are not subject to stamp duty.

Some of the amounts and rates indicated in the stamp duties schedule are as follows:

• shares, bonds and any instrument representative of share capital — 0.4%

• sale and purchase, exchange and transfer of immovable property — 0.2%

• lease and sublease of immovable property — 2%

• mortgage and pledge — 0.3%

• notarial deeds — MZN250

• powers of attorney with any other power — MZN100

• loans (credit for a term of five years or longer) — 0.5%

• legal, judicial, fiscal and customs proceedings (per page) — MZN1

• warranty insurance — 3%.

The entities which are responsible for assessing and paying over stamp duty include (inter alia) notaries, civil, commercial and real estate registrars and other public entities, entities that grant credit, resident credit institutions, finance companies, borrowers or beneficiaries under guarantees or debtors of interest, insurance companies, issuers of bills and other credit instruments, lessors and sub-lessors, and other entities that participate in deeds and contracts or issue or use documents, books, instruments or papers.

Compensation for tax debts

Compensation can be made for any tax debt, except where there are already special rules for compensation (as is the case with VAT). This mechanism of debt write-off can be initiated by the tax authorities or the taxpayer.

In general, the tax authorities will initiate compensation when the taxpayer pays more than the amount effectively due. The tax authorities will notify the taxpayer and, with the taxpayer’s consent, use this overpayment to offset any future tax debt.

Credits resulting from refunds, administrative reviews, complaints or favourable decisions following administrative and judicial appeals under any administrative act are mandatorily applied in compensation.

An exception applies in case of an appeal opposition to debt execution or when this is being paid in instalments.

Compensation initiated by the taxpayer is made under the same terms and conditions as compensation initiated by tax authorities, within the deadline legally established for the payment up to the start of the tax execution process.