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; and
upfront invoices and advanced 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 complementary expenses (such as packaging, transport, insurance) up to the first destination of the goods in Mozambique.
Returns and payment of VAT
The following returns must be submitted:
starting of activity return – to be submitted to the Tax Department 15 days before starting the activity (Model No. 1);
tax registration return – to be submitted to the Tax Department before starting the activity (Model No. 6);
monthly returns with payment – to be submitted up to the last 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 Activity the company; taxpayers
should submit a Declaration of Alterations to the same entity; and
close-down return – to be submitted within 30 days of the relevant Declaration.
VAT payments must be made as follows:
VAT due by taxpayers for the month must be paid to the competent Tax Department by the last working day of the following month; and
VAT assessed must be paid within 30 days after termination.
Interest and penalties
The nonpayment or late payment of the VAT due is subject to a fine that may vary from the amount of unpaid tax to double this amount, but not exceeding MZN2.5 million.
Interest may also be applicable should there be an amount of VAT due. The applicable interest rate is MAIBOR – 12 months plus 2% in force at the date of assessment.
Whenever there is a right to deduct VAT, the amount of deductible VAT must be offset against the amount of VAT due on a monthly basis. If the amount of deductible VAT exceeds the amount due, the difference shall be deductible within the subsequent months. If after 12 months, the amount of credit subsists and is higher than MZN50,000, the taxpayer may apply for the relevant refund.
Irrespective of the 12-month term, the taxpayer is allowed to request a VAT refund when:
it ceases the activities;
it starts carrying on exclusively VAT exempt operations with no right to deduction or is qualified under the exemption or simplified regimes; or
the amount of credit exceeds the
fixed limit of MZN50,000.
The deadline legally established for the Tax Authorities to refund VAT is 30 days. If the deadline is not met, interest will be paid upon special request by the taxpayer.
Objections and appeals
The Tax Authorities issue assessments and taxpayers are entitled to contest such assessments. The process is regulated not only for objection but also for appeal to the administrative court.
The tax liability for any taxpayer exists for up to five years. There is no prescription period for the obligation to charge VAT on a transaction, but we can assume that this obligation falls away after five years.
After one year, input tax may be claimed only upon recognition by the Tax Authorities of such tax credit.
Invoices must be issued by any person/entity which 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. However, the tax authorities do accept that English may be used alongside the Portuguese wording.
As per VAT Regulations in Mozambique, an invoice will only be valid for VAT purposes if it is either –