Tax Residency in Mozambique
1. Criteria for Determining Tax Residency in Mozambique
According to Article 10 of the Mozambican Tax Code, an individual is considered a tax resident in Mozambique if they meet any of the following criteria:
- Physical presence in Mozambique for more than 183 days in a calendar year.
- Having a permanent home in Mozambique.
- Having the center of their vital interests in Mozambique.
For companies, tax residency is determined based on their place of incorporation or management and control. A company is considered a tax resident in Mozambique if it is incorporated in Mozambique or if its management and control is exercised in Mozambique.
2. Impact of International Tax Treaties on Tax Residency Criteria
Mozambique has entered into several double taxation agreements (DTAs) with other countries. These DTAs may modify or provide exceptions to the standard criteria for tax residency as defined in domestic law.
For example, the DTA between Mozambique and South Africa provides that an individual is considered a resident of Mozambique if they have a permanent home in Mozambique or if their center of vital interests is in Mozambique. However, if an individual is considered a resident of both Mozambique and South Africa under the domestic laws of both countries, the DTA provides a tie-breaker rule that determines their residency based on their habitual abode.
Conclusion
The criteria for determining tax residency in Mozambique are designed to ensure that individuals and entities with significant ties to Mozambique are subject to taxation on their worldwide income. International tax treaties may modify or provide exceptions to these criteria, but the ultimate goal is to prevent double taxation and promote cross-border economic activities.
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