Asset management and private equity in Mozambique - Part VIII

Paula Duarte Rocha and Henrique Calvão Martins signed the article "Asset management and private equity in Mozambique - Part VIII", published in Lexology.

« I. Introduction

Collective investment undertakings (such as private equity funds) are subject to the general regime of taxation of income, provided, on the one hand, by the Corporate Income Tax Code (“CIRPC”) and its regulation (Law no. 34/2007, of 31 December amended by Law no. 20/2022, of 30 December and Decree no. 9/2008, of 16 April, respectively) and, on the other hand, in what concerns unit holders, they are subject to: (i) if they are individual persons, the Personal Income Tax Code (“CIRPS”) and its regulation (maxime, Law no. 33/2007, of 31 December and Decree no. 8/2008, 16 of April, respectively); and (ii) if they are legal persons, to the CIRPC.

II. Legal Persons and Equivalent Entities

Legal persons resident for tax purposes in Mozambique are taxed on all their income, including, therefore, both income obtained in Mozambican territory and income obtained abroad (cfr. article 5 no. 1 of the CIRPC), and the general tax rate applicable is, as a rule, 32%, to be levied on taxable profits. Legal persons not resident for tax purposes in Mozambique are taxed only on income obtained in that territory (cfr. article 5 no. 2 of the CIRPC) and are obliged to nominate a tax representative with residence in Mozambique to act on their behalf before Mozambican Tax Authority.

Pursuant to article 5 no. 3 paragraph a) and no. 5, both of CIRPC, the following gains are considered obtained in Mozambique: gains resulted, among others, from the sale of securities issued by entities with head office or effective management located in Mozambican territory, as well as gains resulted from the transfer, direct or indirect, onerous or costless, carried out between nonresident entities, of parts of share capital (as it is the case of shares, quotas, etc.) or other rights and/or participative interests (which includes, in our opinion, the units representatives of the capital of private equity fund), provided that the relevant assets are located in Mozambique, regardless of the place where the sale occurs. […]».

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