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Furthermore, as stated above, 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, the aforesaid rule comprises certain exceptions, namely that the performance of certain services is not taxable when the customer is established or domiciled outside of Mozambique, even if the service provider has its headquarters, permanent establishment or domicile in Mozambique. The said services that are VAT exempt are the following:

  • cession 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 therein;

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

  • leasing and renting of movable assets.

Refunds to foreigners

To PricewaterhouseCoopers Mozambique’s best knowledge, the Mozambican authorities have not yet implemented the mechanisms that

economists, accountants and research and Development (R&D) services, supply of staff, lease [including financial leasing] of movable goods, etc.) are taxable in Mozambique, even if the supplier fails to register, provided the customer is a taxable person. However, these supplies would not be taxable if the customer were a foreign entity, even if the supplier were 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 whenever an invoice or equivalent document is issued, although the term for invoicing is counted from the taxable event.

As such the normal rules of 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 conclusion;

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 customer or after 180 days; and

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

allow tourists and foreign entities to be refunded the VAT paid on their local purchases when they leave the country.

Place, time and value of supplies

Place of supply

VAT is levied on the supply of goods or 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 supplier’s business or permanent establishment from which the services are rendered, or its permanent address.

The following exceptions apply:

  • services related to immovable property located outside Mozambique – place of 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 telecommunications, royalties, licences, trademarks, copyrights, advertising consulting, engineering, lawyers,

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