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Rental Taxes


Under article 4(1) of the VAT Code, the letting of real property is treated as a “provision of services” that is subject to VAT at the rate of 17% (seventeen per cent), as established in article 1(1) of the said Code.

However, article 9(5) of the VAT Code provides that both residential letting and commercial and industrial letting, as well the provision of services in rural areas are exempt from VAT.

The VAT paid by tenant to the landlord must be passed on by the latter to the appropriate tax office by the 30th day of the month following the one to which it relates.

IRPC / Corporate Income Tax

The general principle of the law relating to the payment of rent by a legal entity (tenant) to another legal entity (landlord), is based on the assumption that these payments are subject to withholding tax at the rate of 20% (twenty per cent) under article 62(1) read with article 67(1)(c) of the IRPC Code. However, if the corporate object of the landlord company is the management of its own real property, the said withholding tax will not apply. This is because the law establishes an exemption from this obligation under article 68(f) of the IRPC Code.

The income earned by virtue of the execution of rental agreements or agreements for the assignment of operation are entered into the accounts as profits or gains of the financial year under article 20(1)(b) of the IRPC Code and taxed as part of the total calculation of the tax base of the company

Stamp Duty

Any rental agreement made in the Republic of Mozambique is subject to stamp duty at the rate of 2 % (two per cent), applicable on the value of the highest rent agreed between the parties for one month.

Registration of the Rental Agreement

Rental agreements made for any period greater than six months must be registered at the Land Registry.

Municipal Property Tax – (IPRA)

IPRA is charged on the official taxable value of urban properties located in the municipal area. The tax is payable by whoever is the owner of the property as at 31 December of the previous year, under article 35(1) read with article 45 of the CTA.

The owners of newly built urban properties – but only in respect of the part of the property destined for residential use – may ask the municipal council for a temporary exemption from payment of the IPRA. The exemption is granted for a period of five years from the date of issue of the residential license.

The rates of IPRA applicable to the official taxable value of the property are as follows:

  • 0.4% (zero point four per cent) for residential properties; and
  •  0.7% (zero point seven per cent) for commercial or industrial properties or properties for use by independent professionals as well as for other purposes.

The IPRA must be paid in two equal installments in January and June of each year, except in the case of any legally established exceptions.

Other Municipal Taxes

Article 139 of the CTA establishes a set of rates to be paid for licences granted and for economic activity, which must be paid by the taxable person under the terms established by decision of the municipal council.

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