South Africa Mozambique Double Tax Agreement

Payments made by a Mozambican resident to a non-resident for certain types of interest, rent, royalty, dividends, administrative or administrative expenses and distributions of fiduciary income are subject to corporation tax (IRPC) of up to 20%. However, the tax rate can be reduced by up to 5% under an existing double taxation agreement. Public-private partnerships (PPPs) involve developments in the public sector or in sectors providing public services, with the exception of mineral and oil resources; Large-scale projects business concessions. The general allocation regime for P3s is that of a public offer and a subsidy in accordance with the rules applicable to public procurement. On an exceptional basis and subject to prior government approval, contracting for PPP companies may take the form of negotiations or direct agreements. Mozambique has agreements to avoid double taxation with Portugal, Italy, Mauritius, United Arab Emirates, Macao Special Administrative Region, South Africa, India, Vietnam and Botswana. Tax credits are available for foreign income taxes to avoid or reduce international double taxation. Double taxation conventions (“DBAs”) are internationally agreed legislation between South Africa and another country. South Africa has dozens of such agreements with different countries and the main objective of a DBA is to ensure that any country subject to the agreement knows what its tax rights are to taxpayers. A DBA ensures that a subject is not subject to unjustified taxation, both in South Africa and in the country concerned that is treated in a given DBA. It is therefore a defence of double taxation and defines different requirements that a taxpayer must meet in order to understand where that tax subject is as a taxable resident.

Interest payments including the interest of a resident corporation on non-resident persons with whom they deal are subject to a 20% withholding tax. However, withholding tax may be reduced or removed under an applicable double taxation agreement. Most of Mozambique`s double taxation conventions have a reduced rate of 10%, with the exception of Mauritius and South Africa, where withholding tax has been reduced to 8%. Mozambique has double taxation agreements (TDTs) with the following countries: the amended South African tax law is now fully applicable from 1 March 2020. If you have international economic interests, your income may be taxed in South Africa and abroad, resulting in double taxation. A widespread misunderstanding that we see among South African expatriates is that they think they are “automatically tax-exempt” simply because there is a double taxation agreement between the two countries. This is totally untrue, and there are several factors that need to be considered and objectively proven, and you are always required by law to file a tax return and “right” exemption with contract discharge. For each worker, the employer is subject to the payment of a social security contribution of 4%. Limited liability companies may have a single partner, considered a natural person. This company is referred to as a single quota company. In other cases, limited companies must have at least 2 (two) partners and a maximum of 30 (30) partners.

Mozambican limited companies must have the mandatory wording “Limited” or “Lda” in short.