MOZAMBIQUE Law and Practice Contributed by: João Afonso Fialho, Guilherme Daniel and Helna Vitoldás, VdA
2013, is sustainability and environmental protec - tion in the context of the mining industry. 3.4 Energy-Transition Minerals Mozambique has not yet adopted specific leg - islative initiatives related to energy-transition minerals. 4. Taxation of Mining and Exploration 4.1 Mining and Exploration Duties, Royalties and Taxes According to the Mining Law and the Taxation and Fiscal Benefits Regime of Mineral Opera - tions and their Regulations, holders of mineral rights are subject to the following industry-spe - cific tax regime. Corporate income tax, which is a profit-based tax, is payable at a rate of 32%. Surface tax should be paid by holders of pros - pecting and exploration licences, mining con - cessions and mining certificates on an annual basis and is assessed based on the extension of the concession, as follows. • Prospecting and exploration licences: (a) years 1 and 2 – MZN17.50/hectare; (b) year 3 – MZN43.75/hectare; (c) years 4 and 5 – MZN91/hectare; (d) year 6 – MZN105/hectare; and (e) years 7 and 8 – MZN210/hectare. • Mining concessions: (a) years 1 to 5 – MZN30/hectare; and (b) from year 6 onwards – MZN60/hectare. • Mining certificates: (a) years 1 to 5 – MZN30/hectare; and (b) from year 6 onwards – MZN50/hectare.
Production Tax should be paid by natural or legal persons developing mining activities, calculated based on the value of the mineral extracted, as follows: • diamonds – 8%; • precious metals, precious and semi-precious stones and heavy sand – 6%; • sand and stones – 1.5%; and • base minerals, coal, ornamental rocks and other mineral products – 3%. Mining concessions or mining certificates with a pre-corporate income tax net return in excess of 18% are subject to a windfall profits tax levied on the accumulated net cash flow. The windfall profits tax is payable at a rate of 20%. 4.2 Tax Incentives for Mining Investors and Projects Pursuant to the Taxation and Fiscal Benefits Regime of Mineral Operations, the following exemptions are granted to mining projects dur - ing first five fiscal years after the start of mining activities: • customs duties payable on imported equip - ment (for the prospecting and exploration phase) classified under Class K in the Cus - toms Schedule; and • customs duties payable on imported equip - ment found in Annex II of the Taxation and Fiscal Benefits Regime of Mineral Operations, equivalent to the goods under Class K in the Customs Schedule. A tax stabilisation regime may be negotiated between the government and the holders of mineral rights, with a maximum duration of ten years extendable until the term of the conces - sion, in exchange for a 2% annual increase in the production tax rate.
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