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WHATE OFITAX ON
PESSOASWOFFICES

LEI No.34/2007IN31INDDECEMBER

ACHANGED BYLHERE NOS9/2010IN10INsSEPTEMBER AND

4/2012IN23INJANEIRO

AUPDATED ONJULHO DE2012

 INDEX

PREAMBLE................................................. .................................................... ....... 1

CHAPTER I – INCIDENCE .............................................. ............................................ two

ARTICLE 1 – (Nature of Tax) ........................................ ............................. two

ARTICLE 2 – (Taxable persons) .............................................. ................................. two
ARTICLE 3 – (Stable establishment)................................................. ........................ two
ARTICLE 4 – (Objective incidence)................................................ ............................. 4
ARTICLE 5 – (Extension of tax obligation) ........................................ ............... 5
ARTICLE 6 – (Tax transparency) .............................................. ............................. 6
ARTICLE 7 – (Tax period) ........................................ ........................... 7
ARTICLE 8 – (Giving event) .............................................. .................................... 8

CHAPTER II – EXEMPTIONS................................................. .............................................. 9

ARTICLE 9 – (State, Local Authorities and Social Security Institutions) .......................... 9

ARTICLE 10 – (Public utility associations) .............................................. ............... 9
ARTICLE 11 – (Cultural, recreational and sporting activities) ...................................... 9
ARTICLE 12 – (Cooperatives) ........................................ .................................... 10
ARTICLE 13 – (Other Exemptions) .............................................. ............................. 10
ARTICLE 14 – (Income withheld at source) .............................................. .................. 10

CHAPTER III – DETERMINATION OF COLLECTABLE AMOUNT .............................................. ......11

SECTION I – DGENERAL PROVISIONS.................................................... .................................... 11

ARTICLE 15 – (Rules defining the taxable amount) ....................................... ..... 11
ARTICLE 16 – (Method for determining taxable income)................................... 11
SECTION II – PCOLLECTIVE BODIES AND OTHER RESIDENT ENTITIES EXERCISING THE MAIN TITLE,ACTIVITY
COMMERCIAL, IINDUSTRIAL OR AGRICULTURAL.................................................... .............................. 12
SUBSECTION I – General Rules ............................................. .................................... 12
ARTICLE 17 – (Determination of taxable profit)................................................... ............. 12
ARTICLE 18 – (Periodization of taxable profit) ......................................... .............. 13
ARTICLE 19 – (Multi-annual works) .............................................. .................. 14
ARTICLE 20 – (Income or gains) ........................................ ........................... 15
ARTICLE 21 – (Positive equity variations) ........................................ ............. 16
ARTICLE 22 – (Costs or losses) ........................................ ............................... 17
ARTICLE 23 – (Non-deductible costs)................................................ .......................... 18
ARTICLE 24 – (Negative equity variations) ........................................ ............ 19
ARTICLE 25 – (Financial reallocation of assets)................................................... .................. 20
SUBSECTION II – Reinstatement and amortization regime ................................................ ...20
ARTICLE 26 – (Reintegrable or amortizable elements) ......................................... ....20
ARTICLE 27 – (Reinstatements and amortizations not accepted as costs) ............................. 21
SUBSECTION III – Regime of Provisions and Impairment Losses ................................ 22
ARTICLE 28 – (Tax deductible provisions and impairment losses) .......................... 22
 INDEX

ARTICLE 29 – (Provision for doubtful debts) ....................................... .23

SUBSECTION IV – Other charges regime................................................. ................... 23
ARTICLE 30 – (Uncollectible Credits) .............................................. .......................... 23
ARTICLE 31 – (Social utility achievements) .............................................. ................ 23
ARTICLE 32 – (Sickness, personal accident and life insurance and pension funds)........... 23
ARTICLE 33 – (Charges on pensioners) ....................................... .................... 24
ARTICLE 34 – (Donations within the scope of Patronage) ........................................ ............. 25
ARTICLE 35 – (Donations to the State and other entities) ....................................... ......... 25
ARTICLE 36 – (Non-deductible charges for tax purposes) ........................................ .. 26
ARTICLE 36 A – (Other charges regime) ........................................ .................. 28
SUBSECTION V – Regime of realized capital gains and losses ................................... 28
ARTICLE 37 – (Concept of capital gains and capital losses) ................................... ........ 28
ARTICLE 38 – (Monetary correction of capital gains and capital losses) .......................... 29
ARTICLE 39 – (Reinvestment of realization values) ........................................ .... 29
SUBSECTION VI – Deduction of previously taxed profits ....................................... 30
ARTICLE 40 – (Elimination of double economic taxation of distributed profits) ................ 30
SUBSECTION VII – Deduction of losses................................................. .......................... 31
ARTICLE 41 – (Deduction of tax losses)................................................... ................... 31
ARTICLE 41-A – (Transferability of tax losses) ........................................ ..... 32
SECTION III – PCOLLECTIVE BODIES AND OTHER RESIDENT ENTITIES THAT DO NOT EXERCISE,THE MAIN TITLE,ACTIVITY
COMMERCIAL,INDUSTRIAL OR AGRICULTURAL.................................................... .............................. 32
ARTICLE 42 – (Determination of overall income) ......................................... ......... 32
ARTICLE 43 – (Common and other costs) .............................................. .......................... 33
SECTION IV – ENON-RESIDENT ENTITIES.................................................... .......................... 33
ARTICLE 44 – (Taxable profit from a permanent establishment) ........................................ 33
ARTICLE 45 – (Income not attributable to a permanent establishment) ........................... 34
SECTION V – DETERMINATION OF TAXABLE PROFIT BY INDIRECT METHODS............................................... 34
ARTICLE 46 – (Application of Indirect methods)................................................. .............. 34
ARTICLE 47 – (Simplified regime for determining taxable profit) ......................... 34
ARTICLE 48 – (Indirect Methods) .............................................. ........................... 35
SECTION VI – DCOMMON AND MISCELLANEOUS PROVISIONS.................................................... ..................... 36
SUBSECTION I – Corrections for the purposes of determining the taxable amount ................... 36
ARTICLE 49 – (Transfer Pricing)................................................ ..................... 36
ARTICLE 50 – (Payments to entities resident in countries with a privileged tax regime) .. 37
ARTICLE 51 – (Attribution of profits of companies resident in countries with a privileged tax
regime) ............... .................................................... ............................... 37
ARTICLE 52 – (Thin capitalization) ............................................... ............................. 38
ARTICLE 53 – (Corrections in cases of tax credit and withholding tax)................. 39
SUBSECTION II – Inflows of assets and exchanges of shares in Mergers and Spin-Offs.................................. 39

ARTICLE 54 – (Special regime applicable to asset contributions) ................................... 39

ARTICLE 55 – (Regime applicable to partners of merged or split companies) ................. 39
 INDEX

ARTICLE 56 – (Mergers, splits and transfers of assets involving legal persons other than
companies) ................................ .................................................... ..... 40
ARTICLE 57 – (Exchange of shares) ....................................... ............................. 40
SUBSECTION III – Constitution of companies with business assets owned by an individual.... 41
ARTICLE 58 – (Special fiscal neutrality regime) ........................................ ....... 41
SUBSECTION IV – Derivative financial instruments .............................................. ........ 41
ARTICLE 59 – (General Rules) .............................................. .................................... 41
ARTICLE 60 – (Swaps) .............................................. .......................................... 43

CHAPTER IV – FEES .............................................. ...............................................45

ARTICLE 61 – (General rate) .............................................. ...................................... 45

ARTICLE 62 – (Withholding tax rates)................................................. ..................... 45

CHAPTER V – SETTLEMENT .............................................. ........................................47

ARTICLE 63 – (Competence for liquidation) .............................................. ............... 47

ARTICLE 64 – (Tax credit relating to double economic taxation of distributed
profits) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
47 ARTICLE 65 – (Tax Credit for International Double Taxation)................................ 47
ARTICLE 66 – (Tax credit relating to special payment on account) .................... 48
ARTICLE 67 – (Withholding taxes) ........................................ ........................... 48
ARTICLE 68 – (Exemption from withholding tax) ........................................ ................. 49

CHAPTER VI – PAYMENT .............................................. ........................................51

ARTICLE 69 – (Payment rules) ........................................ .......................... 51

ARTICLE 70 – (Payments on account) ........................................ ......................... 51
ARTICLE 71 – (Special payment on account) .............................................. ................ 51
ARTICLE 72 – (Limitations on payments on account)................................................ ......... 51
ARTICLE 73 – (Minimum limit) .............................................. ................................. 52
ARTICLE 74 – (Credit privileges)................................................. ......................... 52

CHAPTER VII – ACCESSORY OBLIGATIONS .............................................. ..........................53

SECTION I – OACCESSORY DISPUTES OF LIABILITIES.................................................... ....... 53

ARTICLE 75 – (Accounting obligations of companies).................................................. ..... 53
ARTICLE 76 – (Simplified registration regime for entities that carry out commercial activities as
their main purpose) ................................ ............................................. 54
ARTICLE 77 – (Simplified registration regime for entities that do not carry out commercial
activities as their main activity) .............................. .............................................. 55

WHY BDO?................................................. .................................................... ....56

 LEI No.34/2007IN31INDDECEMBER
PREAMBULE

Audit, Taxes and Consulting

PREAMBLE

If there is a need to reformulate income taxes, established by Law no. 15/2002, of 26 June, introducing
changes to the direct taxation that affects the income of legal persons, the Assembly of the Republic,
under the provisions of no. article 127 combined with paragraphO)of paragraph 2 of article 179, of the
Constitution of the Republic, determines:

Article 1: The Corporate Income Tax Code, annexed to this Law, is approved and forms an integral part
of it.

Article 2. The Council of Ministers is responsible for regulating this Law and establishing the necessary
procedures to simplify the ways in which this tax is collected, within 90 days from the date of its
publication.

Article 3: Decree nº 21/2002, of 30 July, its amendments and all complementary legislation that
contradicts this Law are revoked.

Article 4. This Law comes into force on January 1, 2008, and is applicable to income from the 2008
financial year and beyond. Approved by the Assembly of the Republic on December 7, 2007.

The President of the Assembly of the Republic,Eduardo Joaquim Mulémbwè.

Enacted on December 31, 2007.

Publish:

The President of the Republic, ARMANDO EMÍLIO GUEBUZA.

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CHAPTER I – IINCIDENCE

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CHAPTER I – INCIDENCE

ARTICLE 1 – (Nature of Tax)

Corporate income tax – IRPC, is a direct tax that is levied on income obtained, even when arising from
illicit acts, during the tax period, by the respective taxpayers, under the terms of this code.

ARTICLE 2 – (Taxable subjects)

1. The following are IRPC taxable persons:

a) Commercial or civil companies in commercial form, cooperatives, public companies and other legal
entities governed by public or private law with headquarters or effective management in Mozambican
territory;

b) Entities without legal personality, with headquarters or effective management in Mozambican

territory, whose income is not taxable under Personal Income Tax (IRPS) or Corporate Income Tax (IRPC)
directly in the ownership of natural or legal persons;

c) Entities, with or without legal personality, that do not have their headquarters or effective
management in Mozambican territory, under the conditions established in articles 4 and 5 of this Code,
whose income obtained therein is not subject to IRPS.

2. Subparagraph b) of number 1 includes, in particular, existing inheritances, legal entities in respect of

which invalidity is declared, associations and civil societies without legal personality and commercial or
civil societies in commercial form, prior to definitive registration.

3. For the purposes of this Code, legal persons and other entities that have their headquarters or effective
management in Mozambican territory are considered residents.

ARTICLE 3 – (Stable establishment)

1. A permanent establishment is considered to be any fixed installation through which, in whole or in

part, an activity of a commercial, industrial or agricultural nature is carried out, including the provision
of services.

2. The following are included, in particular, in the notion of permanent establishment referred to in the previous paragraph:

a) A place of management, branch, office, factory, workshop, mine, oil or gas well, quarry or any other
place for the extraction of natural resources located in Mozambican territory;

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b) A construction, installation or assembly site or site, when its duration or the duration of the work or
activity exceeds six months.

3. In the case of subcontracts, the subcontractor is considered to have a permanent establishment on the site if
he carries out his activity there for the same period referred to in paragraph b) of the previous paragraph.

4. Coordination, inspection and supervision activities in connection with the establishments indicated in
paragraph b) of paragraph 2 and in the previous paragraph, as well as the installations, platforms or
drilling boats used for prospecting or exploring natural resources also constitute an establishment
stable under the conditions mentioned therein.

5. For the purposes of counting the period referred to in paragraph b) of paragraph 2 and paragraph 3,
in the case of construction, installation or assembly sites, the period applies to each site individually,
from the starting date of activity, including preparatory work, with temporary interruptions, the fact that
the project having been commissioned by several people or subcontractors being irrelevant.

6. A permanent establishment is also considered to exist when a person who is not an independent
agent under the terms of paragraph 7 acts in Mozambican territory on behalf of a company and has,
and habitually exercises, powers of intermediation and conclusion of binding contracts the company,
within the scope of its activities.

7. A company is not considered to have a permanent establishment in Mozambican territory simply

because it carries out its activity there through a broker, a commission agent or any other independent
agent, as long as these people act within the normal scope of their activity, supporting its business risk.

8. Without prejudice to the provisions of paragraph b) of paragraph 2 and paragraph 3 of this article, the
concept of "permanent establishment" does not include activities of a preparatory or auxiliary nature,
exemplified below:

a) Facilities used solely to store, display or deliver goods belonging to the company;

b) A warehouse for goods belonging to the company maintained solely to store, display or deliver them;

c) A warehouse of goods belonging to the company maintained solely to be processed by another

company;

d) A fixed installation, maintained solely to purchase goods or gather information for the company;

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e) A fixed installation, maintained solely to carry out, for the company, any other activity of a preparatory
or auxiliary nature;

f) A fixed installation, maintained solely for the exercise of any combination of the activities referred to in
subparagraphs a) to e), provided that the overall activity of the fixed installation resulting from this
combination is of a preparatory or auxiliary nature.

9. For the purposes of the imputation provided for in article 6, it is considered that the partners or members of the

entities referred to therein that do not have their headquarters or effective management in Mozambican territory

obtain this income through a permanent establishment located there.

ARTICLE 4 – (Objective incidence)

1. IRPC is levied on:

a) The profit of commercial or civil companies in commercial form, of cooperatives and public companies
and of other legal persons or entities referred to in subparagraphs a) and b) of no. commercial,
industrial or agricultural;

b) The overall income, corresponding to the algebraic sum of the income of the various categories considered
for IRPS purposes, of the entities referred to in subparagraphs a) and b) of paragraph 1 of article 2 that do not
carry out, primarily, an activity of a commercial nature, industrial or agricultural;

c) Profits attributable to a permanent establishment located in Mozambican territory of entities, with or

without legal personality, that do not have their headquarters or effective management in Mozambican
territory and whose income obtained there is not subject to IRPS;

d) Income from the various categories, considered for IRPS purposes, earned by entities mentioned in
the previous paragraph that do not have a permanent establishment in Mozambican territory or that, if
they do, are not attributable to them.

2. For the purposes of the provisions of the previous paragraph, profit consists of the difference between the
values of net assets at the end and beginning of the taxation period, with the corrections established in this
code.

3. Components of the profit attributable to the permanent establishment for the purposes of paragraph
c) of paragraph 1 are income of any nature obtained through it, as well as other income obtained in
Mozambican territory from activities identical or similar to those carried out through that establishment.
stable status held by the entities mentioned therein.

4. For the purposes of this Code, all activities that consist of carrying out economic operations of a
business nature, including the provision of services, are considered to be of a commercial, industrial or
agricultural nature.

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ARTICLE 5 – (Extension of tax obligation)

1. Legal persons and other entities with headquarters or effective management in Mozambican territory
are subject to IRPC on all of their income, including that obtained outside that territory.

2. Legal persons and other entities that do not have their headquarters or effective management in
Mozambican territory are subject to IRPC only in relation to income obtained there.

3. For the purposes of the provisions of the previous paragraph, income attributable to a permanent
establishment located there is considered to be obtained in Mozambican territory, as well as those that, not
meeting these conditions, are indicated below:

a) Income relating to properties located in Mozambican territory, including gains resulting from their
costly transfer;

b) Gains resulting from the onerous transfer of parts representing the capital of entities with
headquarters or effective management in Mozambican territory or other securities issued by entities
that have headquarters or effective management there or parts of capital or other securities when, not if
these conditions are met, the payment of the respective income is attributable to a permanent
establishment located in the same territory;

c) Income mentioned below whose debtor has residence, headquarters or effective management in
Mozambican territory or whose payment is attributable to a permanent establishment located there:

(i) Income from intellectual or industrial property and also from the provision of information regarding
experience acquired in the industrial, commercial or scientific sector;

(ii) Income derived from the use or concession of the use of agricultural, industrial, commercial or
scientific equipment;

(iii) Other income from capital investment;

(iv) Remuneration referred to as members of statutory bodies of legal entities and other entities;

(v) Prizes for social entertainment games, namely: lotteries, raffles and mutual bets, as well as amounts
or prizes awarded in any draws and other games provided for in Law No. 9/94, of 14 September;

(vi) Income from intermediation in the conclusion of any contracts;

(vii) Income derived from other services provided or used in Mozambican territory.

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d) Income derived from the exercise in Mozambican territory of the activity of entertainment
professionals or sportspeople, except when proof is provided that they do not directly or indirectly
control the entity that obtains the income.

4. The income listed in paragraph c) of the previous paragraph is not considered to be obtained in
Mozambican territory when it constitutes a charge to the permanent establishment located outside that
territory relating to the activity carried out through it.

5. For the purposes of the provisions of this Code, Mozambican territory also includes areas where, in
accordance with Mozambican legislation and international law, the Republic of Mozambique has
sovereign rights in relation to prospecting, research and exploitation of natural resources on the
seabed , its subsoil and the overlying waters.

ARTICLE 6 – (Tax transparency)

1. It is imputed to the partners, integrating, under the terms of the applicable legislation, into their
taxable income for the purposes of IRPS or IRPC, as the case may be, the taxable amount, determined
under the terms of this code, of the companies indicated below, with headquarters or effective
management in Mozambican territory, even if there has been no distribution of profits:

a) Civil companies not incorporated in commercial form;

b) Professional societies;

c) Companies for the simple administration of assets, whose majority of the share capital belongs,
directly or indirectly, for more than 180 days of the fiscal year, to a family group or whose share capital
belongs, on any day of the fiscal year, to a number of members not exceeding five and none of them is a
legal entity governed by public law.

2. The imputation referred to in the previous number is made to the partners or members under the terms that result

from the constitutive act of the entities mentioned therein or, in the absence of information, in equal shares.

3. For the purposes of paragraph 1, the following are considered:

a) Civil companies not constituted in commercial form, companies of people that do not aim to carry out
commercial acts and that are subject to civil law;

b) Professional company, one established to carry out a professional activity included in the list of the
Classification of Mozambican Economic Activities by Branches of Activity (CAE), in which all partners are
professionals in that activity and provided that these, if considered individually, would fall within the
category of income from self-employment for IRPS purposes;

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c) Society for simple asset management, a company that limits its activity to the administration of goods
or values held as a reserve or for enjoyment or to the purchase of buildings for the housing of its
members, as well as one that jointly carries out other activities and whose profits relating to these
assets, values or buildings reach, on average over the last three years, more than 50% of the average,
during the same period, of their total income;

d) Family group, made up of people united by conjugal or adoption ties, as well as kinship or affinity in a
direct or collateral line up to and including the 4th degree.

ARTICLE 7 – (Tax period)

1. IRPC, except as provided in paragraph 3 of the following article, is due for each economic year, which coincides with

the calendar year, without prejudice to the exceptions provided for in this article.

2. Companies and other entities subject to IRPC may adopt an annual tax period different from that
established in the previous paragraph, when reasons determined by the type of activity justify it, which
must be maintained for at least the following five years, as long as duly authorized by order of the
Minister who oversees the area of Finance.

3. In the case of companies and other entities subject to IRPC that do not have their headquarters or
effective management in Mozambican territory and have a permanent establishment there, they may,
by express communication to the Tax Administration, adopt an annual tax period different from that
established in paragraph 1 , to be considered from the end of the financial year in which the
communication was made, which must be maintained for at least the following five financial years.

4. The tax period may, however, be shorter than one year in the following circumstances:

a) In the case of starting an activity, where the tax period is between the date on which activities begin
or income that gives rise to tax liability begins and the end of the year;

b) In the case of cessation of activity, in which the tax period is between the beginning of the year and
the date of cessation of activity;

c) When the conditions for subjection to tax occur and cease to occur in the same financial year, which is
constituted by the period actually elapsed;

d) In the year in which, in accordance with paragraphss2 and 3, a different taxation period is adopted from the one

that had been followed in general terms, which is constituted by the period between the beginning of the calendar

year and the day immediately preceding the beginning of the new period.

5. The tax period may exceed one year in relation to companies and other entities in liquidation, where it
has a duration corresponding to that of the latter, and may not exceed three tax years, under the terms
established in this Code.

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6. The limit established in the previous paragraph may be extended upon a reasoned request addressed
to the Tax Administration.

7. For the purposes of this Code, the cessation of activity occurs:

a) In relation to entities with headquarters or effective management in Mozambican territory, on the date of
the closing of the liquidation, or on the date of the merger or division, as for companies extinguished as a
result of these, or on the date on which the headquarters and effective management cease to exist is located
in Mozambican territory, or on the date on which acceptance of the existing inheritance takes place or on
which the declaration that it is vacant in favor of the State takes place or on the date on which the conditions of
subjection no longer apply to tax;

b) In relation to entities that do not have their headquarters or effective management in Mozambican territory,
on the date on which they completely cease to carry out their activity through a permanent establishment or
cease to obtain income in Mozambican territory.

ARTICLE 8 – (Giving event)

1. Taxable event consists of obtaining income, whatever the source or origin, by the taxpayer.

2. The taxable event is considered to have occurred on the last day of the tax period.

3. The following income, obtained by non-resident entities, which is not attributable to a permanent
establishment located in Mozambican territory, is excluded from the provisions of the previous paragraph:

a) Gains resulting from the transfer of property for consideration, where the triggering event is considered to have

occurred on the date of transfer;

b) Gains resulting from the transfer for consideration of parts representing the capital of entities with headquarters or

effective management in Mozambican territory or other securities referred to in paragraph b) of paragraph 3 of article

5, in which the triggering event is considered to have occurred on the date of streaming;

c) Income subject to definitive withholding tax where the triggering event is considered to have
occurred on the date on which the obligation to do so occurs.

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CHAPTER II – IFEELINGS

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CHAPTER II – EXEMPTIONS

ARTICLE 9 – (State, Local Authorities and Social Security Institutions)

1. The following are exempt from this tax:

a) The State;

b) Local authorities and associations or federations of municipalities, when they carry out activities whose
purpose is not aimed at obtaining profit;

c) Legally recognized social security institutions and social security institutions.

2. The exemption referred to in paragraphs a) and b) of paragraph 1 does not cover public and state-owned companies, which

are subject to tax under the terms regulated in this Code.

ARTICLE 10 – (Public utility associations)

1. The following are exempt from IRPC:

a) Duly recognized public, social or cultural entities, when their purpose is not commercial, industrial or
agricultural activities;

b) Public benefit associations referred to in Law No. 8/91, of 18 July, duly recognized, in relation to the
direct operation of social entertainment games, provided for in Law No. 9/94, of 14 September, buffets ,
restaurants, daycare centers and similar services, publishing or marketing of books or other publications
that are intended exclusively to complement the achievement of its basic objective;

c) Associations of mere public benefit that predominantly pursue scientific or cultural, charitable,
assistance or charitable purposes in relation to the direct exploitation of social entertainment games,
provided for in Law No. 9/94, of 14 September, buffets, restaurants, daycare centers and similar
services, which are intended exclusively to complement the achievement of its basic objective.

2. The exemptions provided for in paragraph c) of the previous paragraph are recognized by order of the
Minister who oversees the area of Finance at the request of interested parties, which defines the extent of the
respective exemption in harmony with the objectives pursued by the entities in question.

ARTICLE 11 – (Cultural, recreational and sporting activities)

1. Income directly derived from the exercise of cultural, recreational and sporting activities is exempt
from IRPC, provided that such income and social assets are intended for the purposes of their creation
and in no case are distributed directly or indirectly among the partners.

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2. The exemptions provided for in the previous paragraph can only benefit associations legally constituted to
carry out these activities under the conditions established therein.

3. Income directly derived from the exercise of the activities indicated in paragraph 1 for the purposes of the

exemption provided for therein is not considered to be income derived from any commercial, industrial or agricultural

activity carried out, even if on an ancillary basis, in connection with these activities.

ARTICLE 12 – (Cooperatives)

1. Agrarian, crafts and cultural cooperatives are subject to a reduction in the general IRPC rate of 50%.

2. Income subject to IRPC due to withholding at source is not covered by the exemptions provided for in the previous

paragraph.

ARTICLE 13 – (Other Exemptions)

1. Income directly resulting from the exercise of an activity subject to the Special Tax on Gaming
established by Law no. 8/94, of 14 September, is also exempt from IRPC, in accordance with the law.

2. Companies and other entities to which, under the terms of article 6, the tax transparency regime
applies are not taxed in IRPC.

ARTICLE 14 – (Income withheld at source)

The exemptions in articles 10, 11 and 12 of this Code do not cover income subject to withholding tax,
paid to the entities referred to therein.

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CHAPTER III – DETERMINATION OF COLLECTABLE AMOUNT

Audit, Taxes and Consulting

CHAPTER III – DETERMINATION OF COLLECTABLE AMOUNT

SECTION I – General provisions

ARTICLE 15 – (Rules defining the taxable amount)

1. For the purposes of this Code, the taxable amount is:

a) By deducting from the taxable profit determined in accordance with articles 17 and following, tax losses,
determined in accordance with the provisions of this Code, in relation to the legal persons and entities referred
to in paragraph a) of paragraph 1 of article 4;

b) Income by global deduction, determined in accordance with the provisions of this Code, of common
and other costs attributable to income subject to tax and non-exempt, in accordance with article 43, in
relation to legal persons and entities referred to in paragraph b) of the paragraph 1 of article 4;

c) By deducting from the taxable profit attributable to that establishment, determined in accordance
with the provisions of this Code, the tax losses attributable to that permanent establishment,
determined in accordance with the provisions of this Code, with the necessary adaptations, including
those prior to the cessation of activity by virtue of the headquarters and effective management no
longer being located in Mozambican territory, to the extent that they are attributable to it, in relation to
non-resident entities with a permanent establishment in Mozambican territory;

d) For the income of the various categories determined in accordance with article 45, in relation to non-
resident entities that obtain income in Mozambican territory that is not attributable to a permanent
establishment located there.

2. When taxable profit is determined using indirect methods, including the simplified regime, in
accordance with article 46 et seq., as well as when the simplified bookkeeping regime is chosen, the
provisions of subparagraphs a), b) and c do not apply. ) of the previous number.

3. The corrections provided for in articles 49 et seq. are applicable, where appropriate, in determining
the tax base of legal persons and other entities referred to in paragraphs a), b) and c) of paragraph 1 of
this article.

4. To determine the taxable amount, any tax benefits granted under the terms of the Law are also
deducted.

ARTICLE 16 – (Method for determining taxable income)

1. The declarative method in which, as a rule, the taxable amount is determined based on the taxpayer's
declaration, subject to control by the Tax Administration.

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2. In the absence of a declaration, the Tax Administration is responsible, when applicable, for determining the
taxable amount.

3. Taxable profit may be determined by indirect methods under the terms and conditions referred to in
section V of this Chapter.

SECTION II – Legal entities and other resident entities carrying out commercial,
industrial or agricultural activities as their main activity

SUBSECTION I – General Rules

ARTICLE 17 – (Determination of taxable profit)

1. The taxable profit of legal persons and other entities mentioned in paragraph a) of paragraph 1 of
article 4 is constituted by the algebraic sum of the net profit for the year and the positive and negative
equity variations recorded in the same period and not reflected in that result, determined with based on
accounting and eventually corrected in accordance with this Code.

2. For the purposes of the provisions of the previous paragraph, the net surpluses of cooperatives are
considered as net results for the year.

3. To calculate the net result referred to in paragraph 1, accounting must:

a) Be organized in accordance with the General Accounting Plan and other legal provisions in force for the
respective sector of activity, without prejudice to compliance with the provisions of this Code;

b) Reflect all operations carried out by the taxable person;

c) Be organized in such a way that the results of operations and asset variations subject to the general
IRPC regime can clearly be distinguished from those of others.

4. The provisions of this article are not applied to taxpayers included in the simplified regime for
determining taxable profit provided for in article 47.

5. Taxable persons who are not obliged to have organized accounting and who opt for the simplified
bookkeeping regime, determine the taxable profit based on the records and rules established for this
regime.

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6. Without prejudice to the provisions of the previous paragraphs, taxpayers operating in the mining
and oil sectors must report the profit determined at the end of each year, for each of the concessions or
licenses, individually.1

ARTICLE 18 – (Periodization of taxable profit)

1. Income and costs, as well as other positive or negative components of taxable profit, are attributable
to the year to which they relate, in accordance with the principle of accrual specialization.

2. Positive or negative components considered to relate to previous years are only attributable to the
year when, on the closing date of the accounts of the person to whom they should be attributed, they
were unpredictable or manifestly unknown.

3. For the purposes of applying the principle of specialization of exercises:

a) Income relating to sales is generally considered realized, and the corresponding costs incurred, on
the date of delivery or dispatch of the corresponding goods or, if earlier, on the date on which the
transfer of ownership takes place;

b) Income relating to the provision of services is generally considered to have been realized, and the
corresponding costs incurred, on the date on which the service is terminated, except in the case of
services that consist of the provision of more than one act or a continuous provision or successive in
which they must be led to results in a measure proportional to their execution.

4. For the purposes of paragraph a) of the previous paragraph, any retention of title clauses are not
taken into account, with a sale with retention of title being assimilated to a lease in which there is a
property transfer clause linked to both parties .

5. The income and costs of multi-annual activities may be periodized taking into account the production
cycle or construction time.

6. The part of the costs of multi-annual forestry operations borne during the production cycle equivalent
to the percentage that the extraction carried out in the year represents, in the total production of the
same product and not yet considered in the previous year, is updated by applying the coefficients
contained in the diploma referred to in article 38.

7. Taxable persons whose purpose is the production and sale of agricultural products and other
biological assets, who have adequate records and control over the production cycle, including budgeting
and monitoring of costs or expenses, and whose final product have a

Wording added by article 1 of Law 4/2012 of 23 January. Entry into force on January 1, 2012.

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previously estimated and published market quotation, they can periodize the taxable profit, with the
income and the respective costs being recognized as the production cycle evolves, according to the
percentage of completion of the said cycle and measured, based on the quotations estimated and total
budgeted costs.two

8. Income or gains and costs or losses, as well as any other equity variations, recorded in accounting as
a result of the use of the equity equivalence method, to value investments in associates, do not
contribute to the determination of taxable profit, and must be profits attributed in the year in which the
right to them is considered as income or gains for tax purposes.3

9. Government subsidies whose receipt does not depend on any condition or limitation are attributable
to the exercise on a systematic basis, during the periods necessary to offset the costs related to them.4

10. Costs and income arising from financial instruments valued using the amortized cost method are
allocated to the year to which they relate.5

ARTICLE 19 – (Multi-annual works)

1. The determination of results in relation to works whose production cycle or construction time exceeds
one year can be carried out as follows:

a) According to the criterion of percentage of completion;

b) According to the criteria for closing the work.

2. The use of the percentage of completion criterion is mandatory:

a) When there are partial invoices of the price established for the execution of public or private works
carried out on a contract basis, even if they are not successive in nature and they have reached the level
of completion corresponding to the amounts invoiced;

b) In the case of works carried out on one's own account, sold in fractions, as they are completed and
delivered to buyers, even if the total costs of the same are not known exactly.

twoWording added by article 1 of Law 4/2012 of 23 January. Entry into force on January 1, 2012.

3Wording added by article 1 of Law 4/2012 of 23 January. Entry into force on January 1, 2012.

4Wording added by article 1 of Law 4/2012 of 23 January. Entry into force on January 1, 2012.

5Wording added by article 1 of Law 4/2012 of 23 January. Entry into force on January 1, 2012.

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3. For the purposes of applying the criterion of completion of the work, it is considered completed:

a) If the degree of completion of the work is equal to or greater than 95% and the price is established in
the contract or the sales price is known:

b) When, in the case of public works under a contract regime, provisional acceptance takes place in accordance
with current legislation.

4. The degree of completion of a work, for the purposes of the provisions of the previous paragraphs, is given by the

relationship between the total costs already incorporated in the work and the sum of these costs with the estimated

costs to complete the execution of the same.

5. In cases where, in accordance with the previous paragraphs, results related to works are determined,
the total costs of which necessary for their completion have not yet been borne, a part of the income
corresponding to the estimated costs to be borne may be considered as anticipated revenue .

6. Companies involved in multi-annual works must adopt the same criteria for determining results for
works of the same nature, maintaining the method adopted for determining the results of the work until
the end of the work, except in cases where there is prior authorization of the Tax Administration.

ARTICLE 20 – (Income or gains)

1. Income or gains, at their respective transaction value, are those derived from operations of any
nature as a result of a normal or occasional, basic or merely accessory action, and in particular those
resulting from:6

a) Sales or provision of services, discounts, bonuses and rebates, commissions and brokerages;

b) Income from real estate;

c) Income of a financial nature, such as interest, dividends and other participation in profits, discounts,
premiums, transfers, exchange rate differences as long as they are realized and bond issuance
premiums;7

6Wording given by article 1 of Law 20/2009 of 10 September. Previous wording:

Income or gains are considered to be those derived from operations of any nature as a result of a normal or
occasional, basic or merely accessory action, and in particular those resulting from:

7Wording given by article 1 of Law 20/2009 of 10 September. Previous wording:

c) Income of a financial nature, such as interest, dividends and other participation in profits, discounts, premiums,
transfers, exchange differences and bond issuance premiums;

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d) Remuneration received for holding social positions;

e) Income from goods or values held as a reserve or for enjoyment;

f) Income from industrial property or other analogues;

g) Provision of services of a scientific or technical nature;

h) Realized capital gains;

i) Compensation received for any reason;

j) Subsidies or operating subsidies.

2. Income or gains are also considered to be those derived from:8

a) Valorization of biological assets;

b) Cancellations of extraordinary amortizations, provided that these amortizations have been authorized by
the Tax Authority in accordance with the specific complementary law provided for in paragraph 5 of article 26
of this Code;

3. The following are not considered as income or gains from the year:9

a) Those resulting from operations involving the concentration of business activities, such as corporate
functions and acquisitions of assets and liabilities, provided that the assets, rights and obligations transferred
constitute a universality;

b) Those resulting from increases in the market value of tangible investment assets;

c) Those resulting from changes in the market value of financial assets and financial liabilities, except
when this can be verified by reference to a stock exchange;

d) Those resulting from the deferral of Corporate Income Taxes and any other taxes that directly or
indirectly affect profits.

ARTICLE 21 – (Positive equity variations)

1. Positive equity variations not reflected in the net profit for the year also contribute to the formation of
taxable profit, except:

8Wording added by article 1 of Law 20/2009 of 10 September. Entry into force on January 1, 2010.

9Wording added by article 1 of Law 20/2009 of 10 September. Entry into force on January 1, 2010.

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a) Capital contributions, including share issuance premiums, as well as coverage of losses, in any
capacity, made by capital holders;

b) Potential or latent capital gains, even if expressed in the accounts, including legally authorized
revaluation reserves;

c) Asset increases subject to inheritance and gift tax;

d) Contributions, including participation in losses, from member to member, within the scope of the
participation association and the quota association;

e) Those resulting from the effects of deferral of Corporate Income Tax and any other Taxes that directly
or indirectly affect profits.10

2. Positive equity variations, reflecting the calculation of tax results, are, among others, gains resulting
from the sale of shares of equity and subsidies received not related to assets.

ARTICLE 22 – (Costs or losses)

Costs or losses are considered to be those that are proven to be essential for the realization of income
or gains subject to tax or for the maintenance of the producing source, namely the following:

a) Charges relating to the production or acquisition of any goods or services, such as those relating to
materials used, labour, energy and other general manufacturing, conservation and repair costs;

b) Distribution and sales charges, including transport, advertising and placement of goods;

c) Charges of a financial nature, such as interest on third-party capital applied to the operation,
discounts, premiums, transfers, exchange rate differences as long as they are made, expenses with
credit operations, debt collection and issuance of shares, bonds and other securities, and
reimbursement premiums;11

10Wording added by article 1 of Law 20/2009 of 10 September. Entry into force on January 1, 2010.

11Wording given by article 1 of Law 20/2009 of 10 September Previous wording:

c) Charges of a financial nature, such as interest on third-party capital applied to the operation, discounts, premiums,
transfers, exchange rate differences, expenses with credit operations, debt collection and issuance of shares, bonds and other
securities, and reimbursement premiums ;

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d) Charges of an administrative nature, such as remuneration, subsistence allowances, pensions or

retirement supplements, current consumables, transport and communications, rent, litigation,
insurance, including life insurance and operations in the "Life" sector, contributions to losses of
retirement savings, contributions to pension funds and any complementary social security schemes;

e) Charges for analysis, rationalization, investigation and consultation;

f) Tax and parafiscal charges to which the taxpayer is subject, without prejudice to the provisions of
article 36;

g) Reinstatements and amortizations;

h) Provisions or impairment losses;

i) Realized capital losses;

j) Compensation resulting from events whose risk is not insurable;

k) Charges for advertising campaigns;12

l) Charges for capital increases, legal transformation of companies, issuance of bonds, prospecting,
research and studies;13

m) Charges for bonuses and other remuneration for the work of members of corporate bodies and
employees of the company, as profit sharing, provided that the amounts are paid or made available to
beneficiaries by the end of the following financial year;14

n) Charges resulting from the valorization of biological assets.15

ARTICLE 23 – (Non-deductible costs)

1. The following are not accepted as costs or losses:

12Wording added by article 1 of Law 20/2009 of 10 September. Entry into force on January 1, 2010.

13Wording added by article 1 of Law 20/2009 of 10 September. Entry into force on January 1, 2010.

14Wording added by article 1 of Law 20/2009 of 10 September. Entry into force on January 1, 2010.

15Wording added by article 1 of Law 20/2009 of 10 September. Entry into force on January 1, 2010.

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a) Illicit expenses, namely those resulting from behavior that reasonably indicates a violation of
Mozambican legislation, especially criminal law, even if occurring outside the territorial scope of its
application;

b) Financial leasing income, in relation to the lessee in the art of income intended for financial
amortization.

2. Health and personal accident insurance premiums, as well as amounts spent on insurance and
operations in the “Life” sector, contributions to pension funds and any complementary social security
schemes are not yet accepted as costs, except when are covered by the provisions of articles 31 to 33 of
the Code and are considered income from dependent employment under the terms of the IRPS code.

ARTICLE 24 – (Negative equity variations)

1. Under the same conditions referred to for costs or losses, negative equity variations not reflected in
the net profit for the year also contribute to the formation of taxable profit, except:

a) Those that consist of liberalities or are not related to the taxpayer's activity subject to IRPC;

b) Potential or latent capital losses, even if expressed in accounting;

c) Outflows, in cash or kind, in favor of the capital holders, by way of remuneration or reduction thereof,
or sharing of assets;

d) The benefits provided by the member to the member, within the scope of the participating association;

e) Those resulting from the effects of the deferral of Corporate Income Tax and any other taxes that
directly or indirectly affect profits;16

f) Those resulting from the reclassification of the shares or quotas themselves as liabilities.17

2. Negative equity variations relating to bonuses and other remuneration for the work of members of
corporate bodies and employees of the company, by way of profit sharing, may form part of the taxable
profit for the year to which the result in which they participate relates, provided that the amounts are
paid or made available to beneficiaries by the end of the following financial year.

16Wording added by article 1 of Law 20/2009 of 10 September. Entry into force on January 1, 2010.

17Wording added by article 1 of Law 20/2009 of 10 September. Entry into force on January 1, 2010.

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3. Notwithstanding the provisions of the previous paragraph, negative equity variations relating to
bonuses and other remunerations for the work of members of the company's management body, by
way of profit sharing, do not contribute to the formation of taxable profit, when the beneficiaries are
holders, directly or indirectly, of shares representing at least 1% of the share capital, the said amounts
exceed twice the monthly remuneration earned in the year to which the result in which they participate
relates, with the excess part being assimilated, for tax purposes, to distributed profits.

4. For the purposes of verifying the percentage established in the previous paragraph, it is considered
that the beneficiary indirectly holds shares of the company's capital when they are owned by the spouse,
respective ascendants or descendants up to the 2nd degree, being equally applicable, with the
necessary adaptations, the rules on equalization of ownership established in the Commercial Code and
other commercial legislation.

5. If the requirement set out in paragraph 2 is not met, the IRPC that has not been paid as a result of the
deduction of bonuses that have not been paid or placed into account will be added to the amount of
IRPC paid for the following financial year. available to interested parties within the period indicated
therein, plus the corresponding compensatory interest.

ARTICLE 25 – (Financial relocation of assets)

In the case of delivery of an asset subject to a financial lease to the lessor followed by relocation of that
asset to the same lessee, there is no need to determine any result for tax purposes as a result of this
delivery, with the asset continuing to be reinstated for tax purposes by the lessee, according to the
regime that had been followed until then.

a) In the case of sale of goods followed by financial leasing, by the seller, of those same goods, the
following is observed:

b) If the goods were part of the seller's fixed assets, the provisions of paragraph 1 apply, with the
necessary adaptations;

c) If the goods were part of the seller's stocks, there is no need to determine any tax result as a result of
that sale and they will be listed in fixed assets at the initial acquisition or production cost, this being the
value to be considered for the purposes of the respective reinstatement.

SUBSECTION II – Reinstatement and amortization regime

ARTICLE 26 – (Reintegratable or amortizable elements)

1. Reintegration and amortization of fixed asset elements subject to disappearance, which, on a

repetitive basis, suffer loss of value resulting from their use, the passage of time, technical progress or
any other causes are accepted as costs.

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2. Mere fluctuations that affect asset values are not relevant to the classification of the respective
elements as subject to deterioration.

3. Except for duly justified reasons and accepted by the Tax Administration, fixed asset elements are
only considered subject to deterioration after they come into operation.

4. The reinstatement and amortization of fixed asset elements subject to deterioration may be deducted
as costs for the year to which they relate, by the owner of the assets or, in the case of leasing, by the
entity that assumes the risk of loss or deterioration of the asset .

5. The reinstatement and amortization rates of fixed asset elements, as well as other rules to be used,
will be established in a specific complementary law.18

ARTICLE 27 – (Reinstatements and amortizations not accepted as costs)

The following are not accepted as costs:

a) The reinstatement and amortization of asset elements not subject to deterioration;

b) The reinstatement of properties in the part corresponding to the value of the land or that which is not
subject to perishing;

c) Reinstatements and amortizations that exceed the limits established in previous articles;

d) Reinstatements and amortizations carried out beyond the maximum useful life period;

e) The reinstatement of light passenger or mixed vehicles, in the part corresponding to the acquisition
or revaluation value exceeding 800,000.00MZN, as well as pleasure boats, helicopters and tourist planes
and all related charges, provided that such assets are not allocated to companies operating public
transport services or are not intended to be rented in the course of the normal activity of the company
that owns them;

f) The reinstatement of assets in which the reinvestment of the realizable value has been carried out, carried out in

accordance with article 39, in the part corresponding to the deduction attributed to them in accordance with

paragraph 6 of the same article.

18Wording given by article 1 of Law 20/2009 of 10 September Previous wording:

5. The reinstatement and amortization rates of fixed asset elements, as well as other rules to be used, will be
established in a specific complementary law.

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SUBSECTION III – Provisions and Impairment Loss Regime

ARTICLE 28 – (Tax deductible provisions and impairment losses)

1. For the purposes of the provisions of paragraph h) of article 22, the following are only to be considered as

provisions or impairment losses:19

a) Those whose purpose is to cover doubtful debts, calculated based on the sum of credits resulting
from the company's normal activity existing at the end of the year;

b) Those intended to cover losses in value suffered by stocks, within the limit of losses actually observed;

c) Those intended to incur obligations and charges arising from ongoing legal proceedings due to facts
that determine their inclusion among the costs of the exercise;

d) Those which, in accordance with the discipline imposed by the Bank of Mozambique, have been set up
by companies subject to its supervision, as well as those which, in line with the discipline imposed by the
General Insurance Inspectorate of Mozambique, have been set up by insurance companies insurance
subject to its supervision, including legally established technical provisions,

e) Those that, constituted by companies that operate in the petroleum extractive industry, are intended for the

reconstitution of deposits,

f) Those that, constituted by companies belonging to the extractive industries sector, are intended to cover the
costs of the landscape and environmental recovery of sites affected by exploitation, after the cessation of this,
in accordance with the applicable legislation.

2. The provisions referred to in subparagraphs a) to d) of the previous paragraph that should not be replaced because

the events to which they relate have not occurred and those that are used for purposes other than those expressly

provided for in this article are considered income from the respective exercise.

3. The reinforcements of provisions, carried out in the years following their creation and calculated
based on their value discounted over the passage of time, and recognized in accounting as financial
costs, must be considered as tax costs, as defined in this Code.20

19Wording given by article 1 of Law 20/2009 of 10 September Previous wording:

They are only to be considered as provisions or impairment losses for the purposes of the provisions of paragraph h) of article 22

20Wording added by article 1 of Law 20/2009 of 10 September. Entry into force on January 1, 2010.

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ARTICLE 29 – (Provision for doubtful debts)

1. For the purposes of establishing the provision referred to in paragraph a) of paragraph 1 of the previous
article, the rate of 1.5%, with an accumulated limit of 6%, shall be applied to the value of credits resulting from
the activity of the company existing at the end of the year.

2. The provisions regime referred to in this subsection is subject to regulation.

SUBSECTION IV – Other charges regime

ARTICLE 30 – (Uncollectible Credits)

Bad debts should only be considered directly as costs or losses for the year to the extent that this results
from enforcement proceedings, bankruptcy or insolvency.

ARTICLE 31 – (Social utility achievements)

1. Costs or losses for the year are also considered to be expenses incurred with the optional
maintenance of daycare centers, lactations, kindergartens, canteens, libraries and schools, prevention
and medical and pharmaceutical assistance for patients infected with "AIDS", as well as other
achievements of social utility, recognized as such by the Tax Administration, made for the benefit of the
company's staff and their families, as long as they are of a general nature and do not have the nature of
income from dependent work or, in other words, are difficult or complex individualization for each
beneficiary.

2. Costs or losses for the financial year are also considered, up to a limit of 10% of personnel expenses
recorded as remuneration, wages or salaries, relating to the financial year, those supported by health
and personal accident insurance contracts, as well as with life insurance contracts, contributions to
pension and similar funds or to any complementary social security schemes, which guarantee,
exclusively, the benefit of retirement, supplementary retirement, disability or survival, in favor of the
company's employees.

3. The limit established in the previous paragraph is increased to 20% if workers are not entitled to
Social Security pensions.

4. For the purposes of the limits established in no.s2 and 3, the current values of charges for pensioners
already existing in the company at the date of the conclusion of the Insurance contract or integration
into complementary social security benefit schemes provided for in the respective legislation are not
considered, and this value, calculated actuarially, must be certified by insurance companies or other
competent entities.

ARTICLE 32 – (Sickness, personal accident and life insurance and pension funds)

In the situations provided for in no.s2 and 3 of the previous article, it is understood that the
requirements set out therein are met as long as the following conditions are cumulatively met, with

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with the exception of paragraphs d) and e), in the case of health insurance, personal accident insurance or life
insurance that exclusively covers the risks of death or disability:

a) Benefits must be established for the majority of the company's permanent workers or within the
scope of a collective labor regulation instrument for the professional classes to which the workers
belong;

b) Benefits must be established according to objective and identical criteria for all workers, even if they
do not belong to the same professional class, except in compliance with collective labor regulation
instruments;

c) Without prejudice to the provisions of paragraph 4 of article 31, all of the prizes and contributions provided
for in paragraphss2 and 3 of the same article must not exceed, annually, the limits established in the applicable
case, with the excess not being considered a cost for the year;

d) At least two thirds of the benefits in the event of retirement, disability or survival are actually paid in
the form of a monthly cash benefit for life, without prejudice to the redemption of lifetime annuities in
payment that have not been judicially fixed, under the terms and conditions established by law
regulation issued by the respective supervisory entity, and provided that proof of the respective
assumptions is presented by the taxpayer;

e) The provisions of the general social security regime are monitored with regard to retirement age and
those entitled to the corresponding benefits, without prejudice to a special social security regime, a
regime provided for in an instrument of collective labor regulation or other special legal regime, where
applicable;

f) The management and disposal of the amounts spent do not belong to the company itself and the insurance
contracts are concluded with insurance companies that have headquarters, effective management or
permanent establishment in Mozambican territory and the pension funds or similar funds are constituted in
accordance with the national legislation;

g) They are not considered income from dependent employment, in accordance with paragraph 1 of article 3 of the

IRPS Code.

ARTICLE 33 – (Charges on pensioners)

1. The appropriations intended to cover pension liabilities provided for in paragraph 2 of article 31 of
active personnel on 31 December of the year prior to the conclusion of insurance contracts or entry into
pension funds, for length of service prior to that date, are also accepted as costs under the terms and
conditions established in articles 31 and 32, and may, if those responsibilities exceed the limits
established in no.s2 and 3 of article 31, but not double the same, the amount of the excess will also be
accepted as a cost, annually, for an amount corresponding, at most, to one seventh of that excess,
without prejudice to the consideration of this in those limits, and the current value of those liabilities

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certified by insurance companies, pension fund management companies or other competent entities.

2. Supplementary contributions intended to cover liabilities for pension costs, when made as a result of
changes to the current assumptions on which the initial calculations of those liabilities were based and
provided they are duly certified by the competent authorities, may also be accepted as costs or losses in
the following terms:

a) In the year in which they are carried out, within a maximum period of five years, counting from the year in
which the change in current assumptions took place;

b) In the part in which they do not exceed the accumulated amount of the differences between the
values of the limits provided for in no.s2 or 3 of article 31, relating to the period constituted by the 10
immediately preceding financial years or, if shorter, to the period counting from the exercise of the
transfer of responsibilities or the last change to the current assumptions and the values of the
contributions made and accepted as costs in each one of these exercises.

3. For the purposes of paragraph b) of the previous paragraph, additional contributions intended to
cover liabilities to pensioners are not taken into account, and any contributions made to cover past
liabilities should also not be taken into account when calculating those differences. in accordance with
paragraph 1.

ARTICLE 34 – (Donations within the scope of Patronage)

Donations, in cash or in kind, granted by taxpayers up to a limit of 5% of the previous year's taxable
income are also considered costs or losses for the year if the beneficiary entities:

a) They are associations constituted under the terms of Law No. 8/91, of 18 July, and its regulations, and
other public or private associations or entities, which, without the aim of confessional or partisan
proselytism, carry out, non-profit, actions in the scope of Law nº 4/94, of 13 September;

b) They are private legal entities, natural or collective, that carry out or support, without profit for
members or owners, actions within the scope of Law nº 4/94, of 13 September.

ARTICLE 35 – (Donations to the State and other entities)

The total costs or losses of the year include donations granted to the State and local authorities.

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ARTICLE 35-A – (Charges for pre-professional internships

The remuneration of final-year students undergoing pre-professional internships is also considered to

be costs or losses for the year, up to a limit of 25% of the charges recorded for that purpose in the
respective year.21

ARTICLE 36 – (Charges not deductible for tax purposes)

1. For the purposes of determining taxable profit, the following charges are not deductible, even when
recorded as costs or losses for the year:

a) Corporate Income Tax and any other taxes that directly or indirectly affect profits;

b) Taxes and any other charges levied on third parties that the company is not legally authorized to
bear;

c) Fines and other charges for committing infractions, of any nature, that do not have a contractual
origin, including compensatory interest;

d) Compensation for the verification of events whose risk is insurable;

e) 50% of expenses with subsistence allowances and compensation for travel in the employee's own
vehicle, at the service of the employer, not invoiced to clients, recorded under any title, except for the
part in which IRPS taxation takes place , in the sphere of the respective beneficiary;

f) 80% of representation expenses, recorded under any title;

g) Charges that are not properly documented and expenses of a confidential or illicit nature;

h) The amounts due for the rental without a driver of light passenger or mixed vehicles, in the part
corresponding to the value of the reinstatement of these vehicles that are not accepted as a cost, under
the terms to be regulated;

i) Fuel expenses to the extent that the taxable person does not prove that they relate to goods
belonging to his assets or used by him on a rental basis and that normal consumption, related to the
corporate purpose, is not exceeded from the company;

j) Those resulting from reductions in the market value of tangible investment assets;22

21Article added by article 2 of Law 4/2012 of 23 February. Entry into force on January 1, 2012.

22Wording added by article 1 of Law 20/2009 of 10 February. Entry into force on January 1, 2010.

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k) Those resulting from changes in the market value of financial assets and financial liabilities, if this
cannot be verified by reference to a stock exchange;23

l) Those resulting from outflows, in cash or kind, in favor of the capital holders, as remuneration or
reduction thereof, or sharing of assets;24

m) Those resulting from losses estimated by taxpayers in multi-annual works that are in progress;25

n) Advertising expenses in the amount that exceeds 1% of the volume of income for the respective year.
26

o) Specific taxes on mining and oil activities.27

2. In the case of professional companies subject to the tax transparency regime, the limitation contained
in the IRPS Code, which consists of deducting them by only 50%, is also applicable to charges related to
the use of light passenger or mixed vehicles. .

3. Representation expenses are considered to be, in particular, the costs incurred for receptions, meals,
trips, tours and shows offered in the country or abroad to clients or suppliers or to any other people or
entities.

4. For the purposes of determining taxable profit, 50% of the costs related to light passenger vehicles,
namely rent or rental, repairs and fuel, are not deductible, except in the case of vehicles used for the
operation of a public transport service or intended to be rented in the course of the normal activity of
the respective taxpayer and without prejudice to reinstatements and amortizations not accepted as tax
costs, in accordance with the terms to be regulated and the provisions of paragraphs h) and i) of
paragraph 1 of this article.

23Wording added by article 1 of Law 20/2009 of 10 September. Entry into force on January 1, 2010.

24Wording added by article 1 of Law 20/2009 of 10 September. Entry into force on January 1, 2010.

25Wording added by article 1 of Law 20/2009 of 10 September. Entry into force on January 1, 2010.

26Wording added by article 1 of Law 20/2009 of 10 September. Entry into force on January 1, 2010.

27Wording added by article 1 of Law 4/2012 of 23 February. Entry into force on January 1, 2012.

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ARTICLE 36 A – (Other charges regime)28

1. The charges provided for in paragraphs k) and l) of article 22 are considered as costs over three fiscal
years.

2. For the purposes of the provisions of paragraph k) of article 22, advertising campaigns are considered to be
expenditure made on actions to launch brands, products and/or services with economic projection over a time
horizon of more than one year.

SUBSECTION V – Regime of realized capital gains and losses

ARTICLE 37 – (Concept of capital gains and capital losses)

1. Realized capital gains or losses are considered to be gains obtained or losses suffered in relation to
elements of fixed assets through onerous transfer, whatever the title under which it is operated, as well
as those arising from accidents or those resulting from the permanent allocation of those elements for
purposes unrelated to the activity carried out.

2. Capital gains and losses are given by the difference between the realizable value net of the charges inherent
therein and the acquisition value deducted from reinstatements or amortizations carried out, without
prejudice to the provisions of paragraph 6 of article 39.

3. Realization value is considered:

a) In the case of exchange, the market value of the goods or rights received, increased or decreased,
depending on the case, by the amount of money jointly received or paid;

b) In the case of expropriations or damaged assets, the value of the corresponding compensation;

c) In the case of assets permanently allocated to purposes unrelated to the activity carried out, their market
value;

d) In cases of merger or division, the value at which the elements are recorded in the accounts of the
entity to which they are transferred as a result of those acts;

e) In cases of sale of debt securities, the value of the transaction, net of countable interest from the date
of last maturity or issue, first placement or endorsement, if no maturity has yet occurred, until the date
of transmission, as well as the difference for the part corresponding to those periods, between the
reimbursement value and the issue price, in the case of securities whose remuneration is constituted,
totally or partially, by that difference;

28Wording added by article 2 of Law 20/2009 of 10 September. Entry into force on January 1, 2010

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f) In other cases, the value of the respective consideration.

4. In the case of exchange for future goods, their market value is what would correspond to them on the date of exchange.

5. The promise of purchase and sale or exchange is also considered to be onerous transfer, as soon as the tradition of

the goods has been verified.

6. Capital gains or losses are not considered:

a) The results obtained as a result of the delivery by the lessee to the lessor of the assets subject to
financial leasing;

b) The results obtained in the onerous transfer, or in the permanent allocation under the terms referred to in
paragraph 1, of debt securities whose remuneration consists, in whole or in part, of the difference between the
reimbursement or amortization value and the issue price, first placement or endorsement.

ARTICLE 38 – (Monetary correction of capital gains and capital losses)

1. The acquisition value corrected under the terms of paragraph 2 of the previous article is updated by
applying the currency devaluation coefficients for this purpose published by order of the Minister who
oversees the area of Finance, whenever at least two years from the date of acquisition, with the value
of this update being deducted for the purposes of determining taxable profit.

2. The monetary correction referred to in the previous paragraph is not applicable to financial
investments, except for investments in real estate and shares of capital.

3. For the purposes of paragraph 1, when due to the entry of assets and exchanges of shares in mergers
and divisions of companies, and there is a valuation of the shares received at the same value at which
the old ones were registered, considered if the date of acquisition of the first corresponds to that of the
last.

ARTICLE 39 – (Reinvestment of realization values)

1. It does not contribute to the taxable profit of the years that respect, in the part that has influenced the
tax base, the positive difference between the capital gains and losses realized through the onerous
transfer of elements of tangible fixed assets or as a result of compensation for claims occurring in these
elements whenever the realizable value corresponding to all of the aforementioned elements is
reinvested in the acquisition, manufacture or construction of elements of tangible fixed assets until the
end of the third financial year following that of realization.

2. If there is only partial reinvestment of the realization value, the proportional part of the difference
referred to in the previous paragraph that corresponds to it does not contribute to taxable profit.

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3. Investments in which provisions for reconstitution of deposits are not likely to benefit from the
regime provided for in the previous paragraphs.

4. For the purposes of the provisions of paragraphss1 and 2, taxpayers will mention their intention to make the
reinvestment in the periodic income declaration for the year in which the investment was made, proving in the
same and in the declarations for the three following years the reinvestments made.

5. If the reinvestment is not carried out, the IRPC that is no longer paid due to the provisions of
paragraph 1, plus the corresponding compensatory interest, is added to the value of the IRPC paid in
relation to the third financial year following that of the investment, or, if there is no place to calculate the
IRPC, correct the declared tax loss accordingly.

6. The value of the positive difference between capital gains and capital losses not taxed under the
terms of paragraph 1 is deducted from the acquisition cost or production cost of the tangible fixed asset
assets in which the reinvestment took place for the purposes of the respective reinstatement or
determination of any income taxable under IRPC in relation to them.

7. The deduction referred to in the previous paragraph is made in proportion to the part of the total to be
reinvested that represents the value of each asset in which the reinvestment took place.

8. The Minister who oversees the area of Finance, upon request presented by interested parties until the end
of the year to which the capital gains relate, may authorize, in the case of an investment in which its period of
completion justifies, that the reinvestment period be extended until the end of the fourth financial year
following the one in which it was carried out, then applying the provisions of the previous paragraphs with the
necessary adaptations.

SUBSECTION VI – Deduction of previously taxed profits

ARTICLE 40 – (Elimination of double economic taxation of distributed profits)

1. For the purposes of determining the taxable profit of commercial or civil companies in commercial
form, cooperatives and public companies, with headquarters or effective management in Mozambican
territory, income, included in the tax base, corresponding to profits distributed by entities with
headquarters or effective management in the same territory, subject and not exempt from IRPC or
subject to the Special Tax on Gaming, in which the taxpayer directly holds a capital interest of not less
than 20%29, and provided that this participation has remained in your ownership, uninterruptedly, for
two years prior to the date of making the profits available or, if held for less time, provided that the
participation is maintained for the time necessary to complete that period .

29The rate was changed from 25% to 20%.

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2. The provisions of the previous paragraph are applicable regardless of the percentage of participation
and the period in which it has remained in your ownership, to income from shareholdings in which the
technical reserves of insurance companies, and mutual insurance companies and , as well as the income
of venture capital companies.

3. The provisions of no. public company, with headquarters or effective management in Mozambican
territory, regardless of the value of its contribution, in relation to income, which has been effectively
taxed, distributed by members resident in the same territory.

SUBSECTION VII – Deduction of losses

ARTICLE 41 – (Deduction of tax losses)

1. Tax losses determined in a given year, in accordance with the previous provisions, are deducted from
the taxable profits, if any, from one or more of the five subsequent years.

2. In years in which taxable profit is calculated based on indirect methods, tax losses are not deductible,
even if they are within the period referred to in the previous paragraph, but deduction within that
period is not affected. , of losses that have not previously been deducted.

3. When corrections are made to the tax losses declared by the taxpayer, the deductions made are
altered accordingly, however no cancellation or assessment, even additional, of the IRPC is carried out if
more than six years have elapsed in relation to the one to which taxable income respects.

4. If the taxpayer benefits from partial exemption and/or IRPC reduction, the tax losses suffered on the
respective farms or activities cannot be deducted, in each year, from the taxable profits of the remaining
ones.

5. The period mentioned in paragraph d) of paragraph 4 of article 7, when less than six months, does not count for the

purposes of the temporal limitation established in paragraph 1.

6. Tax losses relating to companies mentioned in paragraph 1 of article 6 are deducted solely from the
taxable profits of the same companies.

7. The provisions of paragraph 1 of this article cease to apply when it is found, at the end of the tax
period in which the deduction is made, that the corporate purpose of the entity to which it relates has
been modified or substantially altered. the nature of the activity previously carried out.

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ARTICLE 41-A – (Transferability of tax losses)30

1. Losses of merged or split companies may be deducted from the taxable profits of the new company
or the acquiring company until the end of the period referred to in paragraph 1 of article 41 of the
Corporate Income Tax Code, counting from the financial year in which they report, as long as
authorization is granted by the Minister supervising the area of Finance, upon request from interested
parties, delivered to the General Directorate of Taxes by the end of the month following the registration
of the merger at the Commercial Registry Office.

2. The granting of the authorization referred to in the previous paragraph is conditional on

demonstrating that the merger is carried out for valid economic reasons, such as the restructuring or
rechannelling of the activities of the intervening companies and is part of a medium or long-term
business strategy, with positive effects on the productive structure, and for this purpose, all necessary or
convenient elements must be provided for perfect knowledge of the intended operation, both its legal
and economic aspects.

3. The provisions of the previous paragraphs may also be applied, with the necessary adaptations, in the
split, in which the split company is extinguished, with the tax losses being transferred to each of the
beneficiary companies, in proportion to the values transferred by that society.

SECTION III – Legal entities and other resident entities that do not
primarily carry out commercial, industrial or agricultural activities

ARTICLE 42 – (Determination of global income)

1. The global income subject to tax of legal persons and entities mentioned in paragraph b) of
paragraph 1 of article 4 is formed by the algebraic sum of the net income of the various categories
determined in accordance with the IRPS Code, applying to the determination of profit the provisions of
this Code are taxable.

2. The provisions that, for IRPS purposes, allow the attribution of income to years different from that of
its receipt, are not applicable in determining the global income referred to in the previous paragraph.

3. Tax losses determined in relation to the exercise of commercial, industrial or agricultural activities and
capital losses may only be deducted, for the purposes of determining global income, from the income of
the respective categories in one or more of the five subsequent years.

30Wording added by article 2 of Law 20/2009 of 10 September. Entry into force on January 1, 2010.

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ARTICLE 43 – (Common and other costs)

1. Costs proven to be essential for obtaining income that have not been considered in determining the
overall income under the terms of the previous article and that are not specifically linked to obtaining
income not subject to or exempt from IRPC are deducted, in whole or in part, to this global income, for
the purposes of determining the taxable amount, in accordance with the following rules:

a) If they are only linked to obtaining subject and non-exempt income, they are deducted in full from the
overall income;

b) If they are linked to the obtaining of subject and non-exempt income, as well as non-subject or
exempt income, the part of the common costs that is attributable to the subject and non-exempt income
is deducted from the overall income.

2. For the purposes of the provisions of paragraph b) of the previous paragraph, the part of the common costs
to be allocated is determined through the proportional distribution of those to the total of subject and non-
exempt gross income and non-subject or exempt income, or in accordance with another criterion considered
most appropriate accepted by the Tax Administration, and this distribution must be highlighted in the income
declaration.

3. Income not subject to IRPC is considered to be, in particular, the fees paid by members in accordance
with the statutes, as well as subsidies received and intended to finance the achievement of statutory
purposes.

SECTION IV – Non-resident entities

ARTICLE 44 – (Taxable profit from a permanent establishment)

1. The taxable profit attributable to permanent establishments of companies and other non-resident entities is
determined by applying, with the necessary adaptations, the provisions of section III.

2. General administration costs that, in accordance with accepted distribution criteria and within limits
considered reasonable by the Tax Administration, are attributable to the permanent establishment, may
be deducted as costs for determining taxable profit, and these criteria must be justified in the income
declaration and uniformly followed in the various financial years.

3. Without prejudice to the provisions of the previous paragraph, in cases where it is not possible to
make an attribution based on the use by the permanent establishment of the goods and services to
which the general charges relate, the following are admissible as distribution criteria, namely:

a) Turnover;

b) Direct costs;

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c) Tangible fixed assets.

ARTICLE 45 – (Income not attributable to a permanent establishment)

Income not attributable to a permanent establishment located in Mozambican territory obtained by

companies and other non-resident entities are determined in accordance with the rules established for
the corresponding categories for IRPS purposes.

SECTION V – Determination of taxable profit by indirect methods

ARTICLE 46 – (Application of Indirect methods)

1. The determination of taxable profit by indirect methods occurs whenever any of the following facts
occur:

a) Lack of organized accounting or record books required in the tax codes, as well as the lack, delay or
irregularity in their execution, bookkeeping or organization;

b) Refusal to display accounting, record books and other legally required supporting documents, as well
as their concealment, destruction, destruction, falsification or tampering

c) Lack of several accounts or groups of books with the purpose of simulating reality before the tax
administration;

d) Errors or inaccuracies in the recording of transactions or well-founded indications that the accounts
or record books do not reflect the exact asset situation and the result actually obtained.

2. The application of indirect methods as a result of accounting anomalies and inaccuracies can only
occur when it is not possible to directly and accurately prove and quantify the elements essential for
determining the taxable amount in accordance with the provisions of section III of this chapter .

3. Delays in carrying out accounting or keeping accounting books and records, as well as failure to
immediately display that or these, only determine the application of indirect methods after the expiry of
the period set out in the legislation for regularization or presentation, without the obligation has been
fulfilled.

4. The period referred to in the previous paragraph must not be less than 15 nor more than 30 days and does not

affect the application of the sanction that corresponds to the infraction eventually committed.

ARTICLE 47 – (Simplified regime for determining taxable profit)

1. Resident taxpayers who primarily carry out an activity of a commercial, industrial or agricultural
nature are covered by the simplified regime for determining taxable profit, with the exception of those
who are required to have duly organized and

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that have a turnover not exceeding 2,500,000.00 MT and that have not opted for the simplified
bookkeeping regime, nor for the determination of taxable profit provided for in Section III of this
chapter.

2. When starting activity, the simplified regime is included, subject to other assumptions, in accordance
with the estimated total annual value of income, contained in the declaration of beginning of activity, if
the option to which the activity is initiated is not exercised. refers to the previous number.

3. The calculation of taxable profit results from the application of the following coefficients:

a) 0.20 to the value of sales of goods and products; and the coefficient;

b) 0.20 to the value of sales and provision of accommodation, restaurant and beverage services;

c) 0.30 on remaining income.

4. The option to apply the general regime for determining taxable profit must be formalized by
taxpayers:

a) In the declaration of the beginning of activity;

b) In the declaration of changes, until the end of the third month of the tax period in which the regime
begins to apply.

5. The option referred to in the previous paragraph is valid from the beginning of the new tax period, after
submission of the declarations provided for in the previous paragraph, as applicable.

6. The application of the simplified regime ceases when the total annual business limit referred to in paragraph
1 is exceeded, in which case the general regime for determining taxable profit applies from the financial year
following that in which this fact is verified.

7. The base values necessary for calculating taxable profit are subject to correction by the Tax
Administration in general terms, without prejudice to the provisions of the final part of the previous
paragraph.

8. In case of correction to the base values referred to in the previous paragraph using indirect methods in
accordance with article 46, the provisions of articles 48 and following are applicable with the necessary
adaptations.

ARTICLE 48 – (Indirect Methods)

1. The determination of taxable profit by indirect methods is carried out by the Director of the tax area
at the head office, effective management or permanent establishment of the taxpayer and is based on
all the elements available to the tax administration, and in particular:

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a) The average net profit margins on sales and provision of services or purchases and supplies and
services from third parties;

b) Average rates of return on invested capital in the sector;

c) The technical coefficients of consumption or use of raw materials and other direct costs;

d) Elements and information declared to the tax administration, including those relating to other taxes,
as well as those relating to companies or entities that have economic relations with the taxpayer;

e) The location and size of production units;

f) Average costs depending on the specific conditions of carrying out the activity;

g) The taxable amount of the nearest year or years determined by the tax administration.

2. The elements referred to in the previous number are established in accordance with the terms to be regulated.

SECTION VI – Common and miscellaneous provisions

SUBSECTION I – Corrections for the purposes of determining the taxable amount

ARTICLE 49 – (Transfer Pricing)

1. The Tax Administration may make any corrections that are necessary to determine taxable profit
whenever, due to special relationships between the taxpayer and another person, whether or not
subject to IRPC, conditions have been established that differ from those that would normally be agreed
between independent persons, resulting in the profit determined based on accounting being different
from what would be determined in the absence of these relationships

2. The provisions of the previous paragraph are also observed whenever the profit determined in the
accounts in relation to entities that do not have headquarters or effective management in Mozambican
territory differs from what would be determined if it were a distinct and separate company that carried
out identical or similar activities, under identical or similar conditions and acting with total
independence.

3. The provisions of paragraph 1 also apply to people who simultaneously carry out activities subject to
and not subject to the general IRPC regime, when identical deviations occur in relation to such activities.

4. When the provisions of paragraph 1 apply in relation to an IRPC taxable person due to special
relationships with another taxable person of the same tax or IRPS, in determining the profit

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of the latter, appropriate adjustments are made to reflect the corrections made in determining the
taxable profit of the former.

ARTICLE 50 – (Payments to entities resident in countries with a privileged tax regime)

1. For the purposes of determining taxable profit, amounts paid or owed, in any capacity, to natural or
legal persons residing outside Mozambican territory and subject to a clearly more favorable tax regime
there are not deductible, unless the taxpayer can prove that such charges correspond to operations
actually carried out and are not abnormal in nature or an exaggerated amount.

2. A natural or legal person is considered to be subject to a clearly more favorable tax regime when, in
the territory of their residence, they are not subject to income tax or, in relation to the amounts paid or
owed, mentioned in the previous paragraph, are subject to an effective tax rate equal to or lower than
60% of the rate provided for in paragraph 1 of article 61.

3. For the purposes of the provisions of the previous paragraph, taxpayers must, at the request of the
Tax Administration, provide evidence of the effective tax rate.

4. The test referred to in paragraph 1 must take place after notification to the taxpayer, carried out at
least 30 days in advance.

ARTICLE 51 – (Attribution of profits of companies resident in countries with a privileged tax regime)

1. Partners residing in Mozambican territory are attributed, in proportion to their shareholding and
regardless of distribution, profits obtained by companies resident outside that territory and subject
there to a clearly more favorable regime, provided that the partner holds, directly or indirectly , a
shareholding of at least 25%, or, if the non-resident company is held, directly or indirectly, in more than
50%, by resident shareholders, a shareholding of at least 10%.

2. The imputation referred to in the previous paragraph is made on the tax base for the year that forms
part of the end of the tax period of the non-resident company and corresponds to the profit obtained by
the company, after deducting the income tax levied on these profits, as applicable in accordance with
the tax regime applicable in the State of residence of that company.

3. For the purposes of paragraph 1, a company is considered to be subject to a clearly more favorable
regime when, in the territory of residence of the company, it is not taxed on income tax or the effective
tax rate is equal to or lower. at 60% of the rate provided for in paragraph 1 of article 61.

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ARTICLE 52 – (Thin capitalization)

1. When the indebtedness of a taxpayer towards an entity that is not resident in Mozambican territory
with which there are special relationships, as defined in this article, is excessive, the interest borne in
relation to the part considered in excess is not deductible for the purposes of determining the taxable
profit.

2. Special relationships are considered to exist between the taxpayer and a non-resident entity when:

a) The non-resident entity holds a direct or indirect participation in the capital of the taxpayer of at least
25%;

b) The non-resident entity, without reaching this level of participation, in fact exercises a significant influence
on management;

c) The non-resident entity and the taxable person are under the control of the same entity, particularly
as a result of being directly or indirectly involved.

3. For the purposes of applying paragraph 1, the existence of special relationships is equated to the situation
of indebtedness of the taxable person towards a third party not resident in Mozambican territory, in which
there has been a guarantee or guarantee provided by one of the entities referred to in previous number.

4. Excess indebtedness exists when the value of debts in relation to each of the entities referred to in
paragraph 2, with reference to any date of the tax period, is greater than twice the value of the
corresponding share in the taxpayer's own capital.

5. To calculate indebtedness, all forms of credit are considered, in cash or in kind, whatever the type of
remuneration agreed, granted by the entities mentioned in paragraph 2, including credits resulting
from commercial operations, when more than six months after the respective due date.

6. To calculate equity, the subscribed and paid-up share capital is added to the other items qualified as
such by current accounting regulations, except those that reflect potential or latent capital gains or
losses, namely those resulting from revaluations not authorized by specific legislation relating to tax
matters or the application of the equity equivalence method.

7. The provisions of paragraph 1 do not apply if, having exceeded the coefficient established in
paragraph 4, the taxpayer demonstrates, taking into account the type of activity, the sector in which it
operates, the size of the companies and other criteria relevant, which could have obtained the same
level of debt and under similar conditions as an independent entity.

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8. The proof referred to in the previous paragraph must be presented within 30 days after the end of the
tax period in question.

ARTICLE 53 – (Corrections in cases of tax credit and withholding tax)

1. When determining the taxable amount subject to tax:

a) When there is income that gives the right to tax credit due to double economic taxation of profits
distributed under the terms of article 64, the amount of the tax credit applicable must be added to the
included income;

b) When there is income obtained abroad that gives the right to tax credit for international double
taxation under the terms of article 65, such income must be considered for taxation purposes at the
respective gross amounts of income taxes paid abroad.

2. Whenever IRPC has been withheld at source in relation to income included for taxation purposes, the
amount to be considered in determining the taxable amount is the respective gross amount of tax
withheld at source.

SUBSECTION II – Inflows of assets and exchanges of shares in Mergers and Spin-Offs

ARTICLE 54 – (Special regime applicable to asset contributions)

1. When determining the realized capital gains and losses relating to the shares of share capital received
in return for the contribution of assets, these shares of capital are considered at the net accounting
value that the elements of the transferred assets and liabilities had in the company's accounts. company
that makes the contribution of assets.

2. For the purposes of the previous paragraph, it is considered:

a) Transfer of assets – the operation by which a company transfers, without being dissolved, the set of
one or more branches of its activity to another company, in exchange for parts of the share capital of
the acquiring company;

b) Branch of activity – the set of elements that constitute, from an organizational point of view, an
autonomous economic unit, that is, a set capable of functioning by its own means, which may include
debts incurred for its organization or operation.

ARTICLE 55 – (Regime applicable to partners of merged or split companies)

1. In the case of mergers and divisions of resident companies under the terms to be regulated, there is
no place, in relation to the shareholders of the merged companies, for the determination of gains or
losses for tax purposes as a result of the merger, as long as the new shareholdings the value at which
the old ones were registered.

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2. The provisions of the previous paragraph do not prevent the taxation of the shareholders of the
merged companies in relation to the amounts of money that may be attributed to them as a result of
the merger.

ARTICLE 56 – (Mergers, spin-offs and transfers of assets involving legal persons other than companies)

For mergers and divisions, carried out under legal terms, of IRPC taxpayers resident in Mozambican
territory that are not companies and their respective members, the provisions of the previous articles
apply, with the necessary adaptations.

ARTICLE 57 – (Exchange of shares)

1. For the purposes mentioned in this article, an exchange of shares is considered to be the operation by
which one company (acquiring company) acquires a stake in the share capital of another (acquired
company), which has the effect of granting it the majority of rights voting rights of the latter, by granting
to its shareholders, in exchange for their securities, securities representing the share capital of the first
company and, possibly, a sum of money not exceeding 10% of the nominal value, or in the absence of
such value nominal, of the book value equivalent to the nominal, of the securities delivered in exchange.

2. The attribution, as a result of an exchange of shares, of securities representing the share capital of the
acquiring company to the shareholders of the acquired company does not give rise to any taxation of
the latter if they continue to value, for tax purposes, the new shareholdings for the value at which the
old ones were registered, determined in accordance with the provisions of this Code, which will be
subject to autonomous accounting records in relation to other shares possibly held in relation to the
same entity.

3. The provisions of the previous paragraph are only applicable provided that the following conditions are
cumulatively met:

a) The acquiring company and the acquired company are resident in Mozambican territory;

b) The shareholders of the acquired company are people or entities resident in third States when the
securities received represent the share capital of an entity resident in Mozambican territory.

4. The provisions of paragraph 2 do not prevent the taxation of partners in relation to the amounts in money that may

be attributed to them under the terms of paragraph 1.

5. For the purposes of the provisions of the previous paragraphs, the partners of the acquired company must include

the following elements in the tax documentation process:

a) Declaration containing a description of the share exchange operation, date on which it took place,
identification of the intervening entities, number and nominal value of shares delivered and shares

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received, value at which the shares delivered were recorded in the accounts, amount of money
eventually received, result that would be included in the tax base if the regime provided for in this article
were not applied and demonstration of its calculation;

b) Declaration by the acquiring company that as a result of the share exchange operation it holds the
majority of the voting rights of the acquired company.

SUBSECTION III – Constitution of companies with business assets owned by an

individual

ARTICLE 58 – (Special fiscal neutrality regime)

1. When the regime established in the IRPS Code is applicable, in relation to the entry of business assets
to raise the capital of a new company, the assets that constitute the assets and liabilities of said assets
subject to transfer must be recorded in the company's accounts to which they are transmitted with the
values mentioned in the natural person's records.

2. When determining the taxable profit of the company referred to in the previous paragraph, the following must be taken into

account:

a) The calculation of results relating to the assets that constitute the transferred heritage is calculated as
if there had not been such transfer;

b) Reinstatements and amortizations on fixed asset elements are carried out in accordance with the
regime that was being followed for the purposes of determining the taxable profit of an individual;

c) The provisions that have been transferred have, for tax purposes, the regime that was applicable to them for
the purposes of determining the taxable profit of the individual.

3. In cases of realization of share capital resulting from the transfer of the entire assets allocated to the
exercise of a professional business activity by a natural person, as provided for in paragraph 1, provided
that cumulatively, the conditions set out in the IRPS Code are observed, the tax losses relating to the
exercise by an individual of commercial, industrial or agricultural activity and not yet deducted from
taxable profit may be deducted from the taxable profits of the new company until the end of the period
referred to in article 41, counting from the year to which they relate , up to 50% of each of these taxable
profits.

SUBSECTION IV – Derivative financial instruments

ARTICLE 59 – (General Rules)

1. When considering income or gains and costs or losses relating to derivative financial instruments, except
those provided for in the following article, the following is observed:

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a) In the case of operations carried out on stock exchanges, in progress at the end of a financial year,
those income or gains and costs or losses are attributable to that financial year and determined in
accordance with the market value recorded on the last day of the same exercise, in the market in which
the operation was carried out;

b) In the case of operations not carried out on a stock exchange, those income or gains and costs or
losses are attributable to the year of settlement of the corresponding operation, except for income or
gains already realized or costs or losses already incurred in previous years.

2. In relation to the operations referred to in paragraph a) of the previous paragraph whose exclusive
objective is to cover operations to be carried out in the following year, in a market of a different nature
and subject to different valuation criteria, the deferral of gains not realized, determined in one year, for,
at most, the following two years, to the extent of losses not yet realized on the covered instrument.

3. Without prejudice to the provisions of paragraph 5 of this article, hedging operations are considered
to be operations that justifiably contribute to the elimination or reduction of a real risk arising from a
firm commitment, including future commitments of operations carried out in the financial year or in
previous financial years , but still ongoing, or a future operation to be carried out, with high probability,
in the following year, relating to a market of a different nature and subject to different valuation criteria,
in such a way that there is an indisputable economic relationship between the covered element and the
hedging operation and a high correlation between them is quantifiable, so that such an operation
should be expected to neutralize, in whole or in part, but substantial, any losses on the covered element
with the gains in the hedging operation.

4. For the purposes of the provisions of the previous paragraph, only the operation whose value does not exceed the

coverage value considered necessary in view of the correlation between the hedging operation and the covered

operation is considered hedging.

5. The following are not fiscally accepted as hedging operations:

a) Operations carried out in such capacity with a view to covering risks to be incurred by other people or
entities or by establishments carrying out the operations whose income is not taxed under the normal
taxation regime;

b) Operations carried out by investment funds, including funds of funds, venture capital funds, pension
funds, insurance companies, credit institutions and other financial institutions, to which the provisions
of no.s8 and 9;

c) Operations that are not properly identified in an appropriate model.

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6. Failure to verify the requirements referred to in paragraph 3 of this article determines, from the date of such non-

verification, the disqualification of the operation as coverage.

7. If the covered operation is not carried out, the amount of tax relating to the year in which it would have
been carried out must be added to the tax that was no longer paid as a result of the provisions of paragraph 2,
plus the corresponding compensatory interest, or, if there is no place for the calculation of the IRPC, the
declared tax loss is corrected accordingly.

8. Without prejudice to the provisions of paragraph 9 of this article, the deduction of losses determined at the
end of a year, in relation to contracts in progress at the end of that year, is limited to the amount by which they
exceed gains not yet taxed on symmetrical positions.

9. Only costs or losses relating to symmetrical positions that are duly identified in an appropriate model
that must be part of the tax documentation process are deductible.

10. For the purposes of the provisions of the previous paragraphs, it is considered that:

a) Symmetrical positions are positions in which the values of capital or income undergo correlated
variations in such a way that the risk of variation in the value of one of them is compensated by the
variation in value of capital or income in another position, regardless of their nature, location or
duration;

b) Position means the holding, directly or indirectly, of contracts relating to derivative financial
instruments, securities, currencies, negotiable credit instruments, loans contracted or granted or
commitments made on these elements.

11. If the substance of an operation or set of operations differs from its form, the moment, source and
character of payments and receipts, income and costs, gains and losses, resulting from that operation,
may be characterized by the Tax Administration in order to take this substance into account.

ARTICLE 60 – (Swaps)

1. In the event of the assignment or cancellation of a swap or forward exchange transaction, with payment and
receipt of settlement amounts, the following must be observed:

a) The amounts due are considered as income or cost of the exercise of contract annulment;

b) Any compensation payment that exceeds the regularization or terminal payments provided for in the
original contract, or the market prices applicable to operations with identical characteristics, namely the
remaining period, is not accepted as a cost for tax purposes, being the responsibility of the intervening
entities the respective proof.

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2. The cost attributed to the acquisition of a contractual position in a pre-existing swap that exceeds the
regularization or terminal payments provided for in the original contract, or the market prices applicable
to operations with identical characteristics, namely remaining period, with the intervening entities being
responsible for providing proof.

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CHAPTER IV – FEES

ARTICLE 61 – (General rate)

1. The IRPC rate is 32%, except in the cases provided for in the following numbers.

2. Agricultural and livestock activities benefit from a reduced rate of 10% until December 31, 2015.31

3. Taxpayers covered by paragraph 2 of this article, who carry out other activities, must detail in their
declarations the taxable profits of activities subject to different rates.

4. Charges that are not properly documented and expenses of a confidential or illicit nature are taxed independently,

at a rate of 35%, without prejudice to the provisions of paragraph g) of paragraph 1 of article 36.

ARTICLE 62 – (Withholding rates)

1. Income subject to withholding tax in accordance with article 67 is taxed at 20%.

2. In the case of income from entities that do not have their headquarters or effective management in
Mozambican territory and do not have a permanent establishment in Mozambique to which they are
attributable, they are taxed at a tax rate of 20%.32

3. The income of the entities referred to in the previous paragraph is taxed at a tax rate of 10% as long
as it is derived from:

a) Provision of telecommunications and international transport services, as well as those resulting from the
assembly and installation of equipment;

b) Construction and rehabilitation of infrastructures for the production, transport and distribution of electrical
energy in rural areas, within the scope of public rural electrification projects;

31Wording given by article 1 of Law 4/2012 of 23 January Previous wording:

…
2. Agricultural and livestock activities benefit from a reduced rate of 10 percent until December 31, 2010.

32Wording given by article 1 of Law 4/2012 of 23 January Previous wording:

…
2. In the case of income from entities that do not have their headquarters or effective management in Mozambican
territory and do not have a permanent establishment in Mozambique, to which they are attributable, they are taxed at
a tax rate of 20%, except for income derived from the provision of telecommunications and international transport
services, as well as those resulting from the assembly and installation of equipment carried out by the
aforementioned entities, which are subject to a 10% tax.

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c) Chartering of maritime vessels to carry out fishing and cabotage activities.33

4. Securities listed on the Mozambique Stock Exchange are also subject to a 10% release fee.34

33Wording added by article 1 of Law 4/2012 of 23 January.

34Wording given by article 1 of Law 4/2012 of 23 January Previous wording:

3. Income from securities listed on the Mozambique Stock Exchange are also subject to a 10% release rate.

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CHAPTER V – SETTLEMENT

ARTICLE 63 – (Competence for settlement)

IRPC settlement is carried out:

a) As a rule, by the taxpayer himself, in the Periodic Declaration and in the Replacement Declaration;

b) By the Tax Administration, in other cases.

ARTICLE 64 – (Tax credit relating to double economic taxation of distributed profits)

1. The deduction relating to economic double taxation is applicable when the tax base of entities with
headquarters or effective management in Mozambican territory has included income corresponding to
profits distributed by entities with headquarters or effective management in the same territory, subject
to IRPC and not exempt , in cases not covered by paragraph 1 of article 40.

2. The deduction consists of a tax credit of 60% of the IRPC corresponding to the distributed profits, included in
the tax base, and will be made until the part of the amount determined under the terms of paragraph 1 of the
previous article that proportionally corresponds to the said profits after the amount of this credit must be
added in accordance with paragraph a) of paragraph 1 of article 53.

3. In cases of values attributed to each of the partners of a company in liquidation, due to sharing, the
deduction referred to in the previous number is applicable to the difference that, when positive, is
considered as income from investment of capital up to the maximum limit the difference between the
value attributed and that which, in the accounts of the liquidated company, corresponds to
contributions actually recorded for the realization of capital, with any excess having the nature of
taxable surplus value.

4. The tax credit regime provided for in this article applies, with the necessary adaptations, in relation to
the income that the member receives from the association in participation, with the distributed income
being effectively taxed, and from the association to the quota.

ARTICLE 65 – (Tax Credit for International Double Taxation)

1. The deduction relating to international double taxation is only applicable when income obtained
abroad has been included in the taxable amount and will correspond to the lesser of the following
amounts:

a) Tax on income paid abroad;

b) Fraction of IRPC, calculated before deduction, corresponding to income that may be taxed in the
country in question.

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2. When there is a convention to eliminate double taxation signed by Mozambique, the deduction to be
made under the terms of the previous paragraph cannot exceed the tax paid abroad under the terms
provided for by the convention.

3. Whenever it is not possible to make the deduction referred to in the previous paragraphs, due to
insufficient tax collection in the year in which the income obtained abroad was included in the tax base,
the remainder may be deducted until the end of the following five years.

ARTICLE 66 – (Tax credit relating to special payment on account)

1. The deduction relating to the special payment on account is made to the amount determined in the
Periodic Income Declaration, for the year to which it relates or, if insufficient, in the following years up to
a maximum of 3 tax years, after making the deductions relating to economic double taxation of
distributed profits, international double taxation and that relating to tax benefits, which must be carried
out until the IRPC is collected, with no refund being given.

2. Regarding the part that is not deducted under the terms of the previous number, until the end of the period provided for

therein, the provisions of the final part of the previous number are observed.

ARTICLE 67 – (Withholding taxes)

1. IRPC is subject to withholding tax on the following income obtained in Mozambican territory:

a) Income from intellectual or industrial property and also from the provision of information regarding
experience acquired in the industrial, commercial or scientific sector;

b) Income derived from the use or concession of the use of agricultural, industrial, commercial or
scientific equipment,

c) Income from investment of capital not covered in the previous paragraphs and property income, as
defined for the purposes of IRPS, when the debtor is a taxpayer of IRPC or when they constitute a
charge related to the commercial, industrial or agricultural activity of the subject IRPS liabilities that
must be accounted for;

d) Remuneration earned as a member of statutory bodies of legal entities and other entities;

e) Game prizes, lotteries, raffles and mutual bets, as well as the importance or prizes awarded to any
draws or competitions, defined in the Social Entertainment Games Law, Law no. 9/94, of 14 September;

f) Income referred to in paragraph d) of no. 3 of article 5 of the IRPC Code obtained by entities not
resident in Mozambican territory, when the debtor thereof is a taxable person of IRPC or

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when they constitute a charge relating to the commercial, industrial or agricultural activity of IRPS
taxpayers who must have organized accounting;

g) Income from intermediation in the conclusion of any contracts and income from other services
provided or used in Mozambican territory.

2. For the purposes of the provisions of the previous paragraph, the income mentioned in paragraph 3 of article 5 is

considered to be obtained in Mozambican territory, except for those referred to in paragraph 4 of the same article.

3. Withholdings at source are in the nature of tax on account, with the exception of cases in which the
holder of non-property income is a non-resident entity that does not have a permanent establishment in
Mozambican territory or that, having it, such income are not attributable to it, in which case the
withholding tax is definitive.

4. Withholdings of income referred to in this article subject to IRPC are made at the rates set out in
article 62.

5. The obligation to withhold IRPC at source occurs on the date of payment of income, its due date, even
if presumed, its making available, its liquidation or the calculation of the respective amount, depending
on the case, with the amounts due withheld be paid under the terms and deadlines established in the
Personal Income Tax Code or in complementary legislation.35

6. The withholding tax referred to in paragraph f) of paragraph 1 takes place whenever the holder of the
income mentioned therein does not provide proof to the entity responsible for the same, before making
it available, that it is not directly controlled or indirectly by entertainment professionals or sportspeople.

ARTICLE 68 – (Exemption from withholding tax)

There is no obligation to withhold IRPC at source, when it is in the nature of a tax on account, in the
following cases:

35Wording given by article 1 of Law 4/2012 of 23 January Previous wording:

5. The obligation to withhold IRPC at source occurs on the date established for an identical obligation in the IRPS Code
or, failing that, on the date the income is made available, and the amounts withheld must be delivered to the state in
accordance with the terms and deadlines established in the IRPS Code or in complementary legislation.

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a) Interest and other forms of remuneration, arising from loans, credit openings or late payments, held
by credit institutions, with headquarters or effective management in Mozambican territory, subject to
IRPC, in relation to the aforementioned, income, even that exempt in relation to them;

b) Interest or any increase in monetary credit, resulting from the extension of the respective due date or
delay in payment, when those credits are a consequence of sales or provision of services by legal
persons or other entities subject, in relation to the same, to IRPC, although exempt in relation to such
income;

c) Profits obtained by entities to which the regime established in article 40 applies;

d) Income referred to in paragraphs b) and g) of paragraph 1 of the previous article, when obtained by
legal persons or other entities subject, in relation to them, to IRPC, even if exempt in relation to such
income;

e) Remuneration referred to in paragraph d) of paragraph 1 of the previous article when earned by accounting
firms that participate in the bodies indicated therein;

f) Property income referred to in paragraph c) of paragraph 1 of the previous article when obtained by
companies whose purpose is to manage their own properties and are not subject to the tax transparency
regime, under the terms of paragraph c) of paragraph 1 of the article 6;

g) Income obtained by a holding company (SGPS), of which the company they have participated in is a
debtor for at least one year and the participation is not less than 10% of the capital with voting rights of
the company in which it participates, either by itself , either jointly with shares in other companies in
which the SGPS are dominant, resulting from supply contracts signed with those companies or
obligations taken by them;

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CHAPTER VI – PAYMENT

ARTICLE 69 – (Payment rules)

Without prejudice to the provisions of the following articles, entities that primarily carry out activities of
a commercial, industrial or agricultural nature and non-residents with a permanent establishment in
Mozambican territory pay the tax under the terms to be regulated.

ARTICLE 70 – (Payments on account)

1. Payments on account are calculated based on the tax paid for the year immediately preceding that in
which these payments are to be made, net of withholding taxes.

2. Payments on behalf of taxpayers will correspond to 80% of the amount of tax referred to in the
previous paragraph divided into three equal amounts, rounded up, in accordance with the terms to be
regulated.

ARTICLE 71 – (Special payment on account)

1. The entities mentioned in article 68 are subject to a special payment on account, to be made in three
installments, during the months of June, August and October of the year to which they relate or, in the
case of adopting a tax period that does not coincide with the calendar year, in months 6, 8 and 10 of the
respective tax period.

2. The amount of the special payment on account is equal to the difference between the value
corresponding to 0.5% of the respective turnover, with a minimum limit of 30 000.00MZN and a
maximum of 100 000.00 MZN, and the amount of the payment on account made in last year.

3. For the purposes of the provisions of the previous paragraph, turnover is determined based on the value of
sales and/or services provided, carried out up to the end of the previous year, and may be rectified in the
following year if it is found to be different from what served as the basis for the respective calculation.

4. The provisions of paragraph 1 are not applicable in the year in which the activity begins and to taxpayers
covered by the simplified regime for determining taxable profit provided for in article 47.

ARTICLE 72 – (Limitations on payments on account)

1. If the taxpayer verifies, from the information available to him, that the amount of the payment on
account already made is equal to or greater than the tax that is due based on the taxable amount for the
year, he may stop making a new payment on account, but he must forward to the tax services in the
area of the headquarters, effective management or permanent establishment where the

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accounting, a declaration limiting payment on account, of an official model, duly signed and dated, until
the end of the deadline for the respective payment.

2. If it is verified, in view of the periodic declaration of income for the year to which the tax relates, that, as a result of

the suspension of the payment on account provided for in the previous paragraph, it is no longer necessary to pay an

amount greater than 20% of that which, under normal conditions , would have been delivered, compensatory interest

is payable from the end of the period within which each delivery should have been made until the end of the period

for submitting the declaration or until the date of payment of the self-assessment, if earlier.

3. If the delivery on account to be made is greater than the difference between the total tax that the taxpayer
deems due and the deliveries already made, the taxpayer may limit the payment to that difference, applying
the provisions of the previous paragraphs with the necessary adaptations.

ARTICLE 73 – (Minimum limit)

There is no charge when, due to settlement carried out by the competent Tax Area Department, the
amount settled is less than 100.00MZN.

ARTICLE 74 – (Credit privileges)

For the payment of IRPC for the last 6 years, the National Treasury enjoys general movable privilege and
real estate privilege over the assets existing in the taxpayer's assets at the date of seizure or other
equivalent act.

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CHAPTER VII – ACCESSORY OBLIGATIONS

SECTION I – Additional obligations of taxpayers

ARTICLE 75 – (Accounting obligations of companies)

1. Commercial or civil companies in commercial form, cooperatives, public companies and other entities that
carry out, primarily, a commercial, industrial or agricultural activity, with headquarters or effective
management in Mozambican territory, as well as entities that , although they do not have headquarters or
effective management in that territory, they have a permanent establishment there, they are obliged to have
organized accounting in accordance with commercial and tax law that, in addition to the requirements
indicated in paragraph 3 of article 17, allows the control of taxable profit.

2. The companies and entities referred to in the previous number whose turnover, relative to the
previous year, is less than 2,500,000.00 MT, may opt for the simplified bookkeeping regime, except in
the case of public companies, companies anonymous and limited by shares.

3. When carrying out accounting, the following must be observed in particular:

a) All entries must be supported by supporting documents, dated and capable of being presented
whenever necessary;

b) Operations must be recorded chronologically, without amendments or erasures, and any errors must be
subject to accounting regularization as soon as they are discovered.

4. Delays in the execution of accounting exceeding 90 days are not permitted, counting from the last day of the
month to which the operations relate.

5. Accounting books, auxiliary records and respective supporting documents must be kept in good order
for a period of 10 years.

6. When accounting is established by computer means, the conservation obligation referred to in the
previous paragraph is extensive documentation relating to the analysis, programming and execution of
computer processing.

7. Documents supporting accounting books and records, which are not authentic or authenticated
documents, may, after three years after the one to which they relate and prior authorization from the
Tax Administration has been obtained, be replaced, for the conditions that are established for tax
purposes, by microfilms that constitute its faithful reproduction and comply with the conditions that are
established.

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8. Companies operating in the mining and oil sectors must organize their accounting on an individual
basis, clearly distinguishing the results of each unit.36

9. Without prejudice to the provisions of the previous number, in the case of co-ownership of mining
licenses or concessions, the accounting must be organized independently, regarding each co-holder,
clearly and unequivocally showing individual costs and profits.37

ARTICLE 76 – (Simplified registration regime for entities that carry out commercial activities as their main
purpose)

1. Entities with headquarters or effective management in Mozambican territory that carry out, primarily,
a commercial, industrial or agricultural activity, which do not have organized accounting in accordance
with the previous article, must maintain the following records:

a) Book of records of purchases of goods and/or books of records of raw materials and consumption;

b) Book of records of sales of goods and/or books of records of manufactured products;

c) Record book of services provided;

d) Record book of expenses and operations linked to investment goods;

e) Book of registration of goods, raw materials and consumables, manufactured products and other
stocks as of December 31st of each year.

2. Taxable persons, when they do not have organized accounting, are obliged to separately highlight in
their respective record book the amounts relating to the reimbursement of expenses incurred in the
name and on behalf of the client, which, when duly documented, do not influence the determination of
the performance.

3. The bookkeeping of the books referred to no. 1 obeys the following rules:

a) Entries must be made within a maximum period of 60 days;

b) Amounts received as a provision, advance or any other purpose intended to cover expenses for which
customers are responsible must be recorded in a current account and recorded in the respective book,
being considered as income in the year following their receipt, without however exceeding the
presentation of the final account for the work provided;

36Wording added by article 1 of Law 4/2012 of 23 February. Entry into force on January 1, 2012.

37Wording added by article 1 of Law 4/2012 of 23 February. Entry into force on January 1, 2012.

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c) Entries must always be supported by supporting documents;

d) Without prejudice to the provisions of the previous paragraphs, the recording of expenses can be
carried out globally, when supported by individual customer current accounts where they are duly
itemized and documented.

4. By order of the Minister who oversees the Finance area, other mandatory records may be established
for determining taxable income.

5. The books referred to in this article must be presented, before use, with the pages duly numbered, to
the respective tax area department so that their opening and closing terms can be signed and the
respective pages initialed, allowing the seal to be used.

ARTICLE 77 – (Simplified registration regime for entities that do not carry out commercial activity as a
main activity)

1. Entities with headquarters or effective management in Mozambican territory that do not primarily
carry out commercial, industrial or agricultural activities, that do not have organized accounting in
accordance with the previous article, must maintain the following records:

a) Income register, organized according to the various categories of income considered for IRPS
purposes;

b) Register of charges, organized in such a way as to distinguish the specific charges for each category
of income subject to tax and the other charges to be deducted, in whole or in part, from the overall
income;

c) Inventory registration, on December 31st, of assets likely to generate taxable gains in the capital gains
category.

2. The records referred to in the previous paragraph do not cover income from commercial, industrial or
agricultural activities possibly carried out, on an ancillary basis, by the entities mentioned therein, and, if
such income exists, an accounting must also be organized which, in accordance with article 75 , allows
control of the profit determined.

3. The records referred to in paragraph 1 and the inventory and balance books, ledger and diary
corresponding to the accounting organized under the terms of paragraph 2 must be presented, before
being used, with the pages duly numbered, to the respective tax department. for the opening and
closing terms to be signed and the respective pages initialed, with the possibility of using the seal.

4. The provisions of paragraphss3, 4, 5, 6 and 7 of article 75.

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 PORWHYBDO?

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WHY BDO?

1.1 BDO at an international level

ABDOwas founded in 1963 in Europe through the merger of vision firms in England, Germany, Holland,
USA and Canada. These firms founded BDO Seidman International.

Ten years later, the founding firms took on the name Binder Djiker Otte & Co:BDO

The current structure of theBDOhas been maintained since 1988 with the adoption of the company's standards and

corporate identityBDOby the 135 countries represented.

ABDOis an international organization that provides services in the areas of Auditing, Consulting and
Taxation. We are present worldwide through a network in 135 countries, encompassing a total human
structure of around 50,000 people.

The global billing ofBDO, amounted to around 5.7 billion US dollars in 2011:

2011 2010 2009

USD Invoicing 5 677 000 000 5 284 000 000 5 026 000 000

Countries 135 119 110

Offices 1 118 1 082 1 138

Collaborators 48 890 46 930 46 035

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The services provided byBDOthey are integrated in such a way as to enable the provision of identical
resources, with similar skills and which enhance success on a global scale.

1.2 BDO in Mozambique

ABDOis in Mozambique, as in the rest of the world, one of the five largest
auditing and consultancy firms, with around 90 professionals in “BDO is an example
Mozambique, full-time and on an exclusive basis, always able to respond to of professionalism and

requests from entities seeking their services. of selfless delivery

to the work to be retained and the

to recommend"
Due to the best relationship between the number of partners and the
number of technicians, each client is accompanied by a so-called “Client
Abubacar Chutumia
Service Partner” who, thanks to his hierarchical position and decision-
Administrator
making capacity, is responsible for the quality of the services provided.
Mcel
This personalized way of acting combines the knowledge thatBDOit has
of its customers with the professional experience of its technicians and the way in which this experience is put
at the service of customers.

Our customers recognize the ability ofBDOMozambique. In the last four years theBDO grew four times
in turnover, no other audit, consultancy and tax firm recorded such growth in Mozambique.

“The in-depth knowledge of the local market, efficient advisory

services, ongoing support and excellent style of
presentation and reporting places BDO above others
firms.”

Rui Lemos
Financial Director

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1.3 Our Services

As throughout the world, the services we provide in
“…and it was with BDO that we finally
Mozambique, to our Clients, national and foreign, public
got our entry visa
and private, are guided by a global vision and a clear local
to the 1st world…”
perspective supported by high standards of ethics and
professional deontology.
Adolfo Correia
Businessperson

BDO's proven experience allows companies and other Tropigalia

organizations to benefit from practical and functional

BDO solutions, applied in partnership with our Clients
and tailored to their real needs.

1.3.1 Consulting (Specialist Advisory Services)

In Consulting, BDO has qualified consultants to support solutions that generate added value for
companies and other entities that increasingly seek our services. BDO's extensive experience allows
companies to benefit from practical and functional solutions designed by our teams of consultants using
advanced technological instruments and always taking into account the particularities of each business.

In this context, we deal, in particular:

― Valuation of companies and corporate parties;

― Viability studies

― Investments and Financing;

― Restructuring of companies and organizations;

― Strategic plans and business plans;

― Information systems consultancy, with particular emphasis on the implementation of integrated

systems and customized developments;

― Human Resources consultancy;

― Specific training actions.

“The provision of services by BDO to the CNCS has always been characterized by a high sense
of professionalism, embodied in service and response to requests in a timely manner and,
above all, with an appreciable standard of quality. It is a partner to recommend
surely!”

Diogo Milagre

Deputy Executive Secretary

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1.3.2 Audit (Assurance Services)

With regard to auditing/account review, we work in Mozambique with
"Intelligence is the only
some of the most qualified specialists in order to provide our Clients
way to master change –
with professional services in accordance with the highest quality
BDO goes above and
standards.
beyond in what it does to
In auditing, in addition to validating the financial information of make its customers more
companies and institutions, we check not only the good application of intelligent.
standards and legislation, but also the internal control system and the We are together It is

continuity of operations. we walk together. Good

there are for the great
Our professional intervention in this area includes:
work what he comes

developing.”
― Complete audit of financial statements;

― Review of internal control; Jorge Ribeiro

General manager
― Review limited to financial statements;
Mediport
― Examination of prospective financial information;

― Specific audits (incentives, accounting due-diligence, investigations, statistics);

― Internal, management, IT, tax and other audits.

-

“The excellent quality of the work that BDO has carried out for the
Mozambique Stock Exchange is only possible in an Organization that knows
how to surround itself with competent, professional and profound staff.”

Jussub Nurmamade
President of the Board of Directors
Mozambique Stock Exchange

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1.3.3 Tax consultancy (Tax & Legal Services)

BDO, in the field of taxation, has extensive experience in preparing tax planning for our Clients, as well
as verifying and monitoring compliance with their tax obligations.

The fundamental purpose of this action is to achieve less taxing solutions, namely through:

― Carrying out preventive tax audits

“The provision of services by
BDO has been guided by ― Carrying out tax due-diligence

quality, rigor and a high level ― Carrying out tax framework studies
of professionalism. AND
― Assistance in the preparation of tax planning operations
a partner we can count
on in the future.” ― Verification and review of tax returns

― Support in the preparation of Transfer Pricing processes

― Preparation of VAT refund processes

Mamudo Ibraimo
― Preparation of tax complaints and challenges
Delegate Administrator
telecommunications of ― Permanent tax monitoring under a tax agreement regime

― Fusions and acquisitions

“The vocation and range of activities of
― Insolvency/bankruptcy process BDO comes to offer a boost to

― Tax framework studies the competitive quality of national

business, providing instruments
― Expatriate taxation
suited to your challenges
― Business creation everyday.”

― Obtaining tax incentives

― Legalization of expatriates Gerry Marketos

Businessperson
― Legalization of capital transfer
Platex

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1.3.4 Accounting (Business Outsourcing)

BDO is the largest company providing accounting services in
the country, with more than 20 dedicated technicians and “BDO is a partner
dozens of clients. fundamental to the
development of techniques
It presents the ideal solution for the entrepreneur or
most modern in the financial
institution that wishes to focus on its core business, leaving
and administrative areas of
high-risk specialized administrative tasks to competent and
Company."
specialized professionals.
Damião Fernandes
As main services we have: Administrator

― Transition and implementation of IFRS

― Accounting Assistance

― Accounting Outsourcing

― Salary Processing

― Account consolidation

― Training

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1.4 Main Customers

We would like to highlight the experience thatBDOhas in the area of consultancy and related work
embodied in several works, among others, for the following institutions, which can serve as a reference
and information collection base:

Commerce and Industry

- Autogas - BAVARIA
- Bio Technologies - Mozambique Explosives Factory
- FARMIL - FARMOBRAZ
- FARMOZ - FASOREL, SARL
- Fiberglass Mozambique - North Pole Refrigerators
- João Ferreira dos Santos Group - Gulamo Comercial
- HIGEST - Mozambique. - Hyper Maputo
- IBA-VET - Isowat Mozambique.
- Lusalite from Mozambique - Mahomed and Company
- Maputo Shopping Center - Mediport
- Médis Farmacêutica - Modil
- Monoframes - PARMALAT
- Pereira & Santos - Galp Energia
- PLASTEX - Plural Editors.
- ROLMAP - Health and Pharmacy
- SGL - Explosives Distribution Society
- Suleimane Esep Amuji - Technique
- The Maputo Clothing Company - Trentyre Mozambique.
- Tricos Mozambique - Tropigalia
- UTOMI

Financial Area Institutions

- 786 Exchange - Africambia
- Afzal Câmbios - Al Meca Currency Exchange
- BMI - Mercantil and Investment Bank - Mozambique Stock Exchange
- Coop Câmbios - EMOSIS
- Exchange Executive - Expresso Cambios
- FNB Mozambique - Global Alliance CGSM
- Mozambique Banking Training Institute - INTERBANCOS

- Multi Exchange - World Currency Exchange

- World Exchange - Sarbaz Exchange

- SOCREMO

Public companies
- Mozambique Airports - Waters of Mozambique
- EDM Electricidade de Moçambique - Teledata from Mozambique
- TDM-Telecommunications of Mozambique - TPM Maputo Public Transport

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Public Sector
- National Road Administration (ANE) - Maputo Municipal Council
- FUNAE Energy Fund - Road Fund
- FUTURE - FIPAG
- INAHINA - INSS
- IDPPE - IGEPE
- Ministry of Agriculture - Ministry of Science and Technology
- Ministry from the Planning It is - Ministry of Health
Development
- Finance Ministry - Ministry of Mineral Resources
- Ministry of Transport and Communications - PIREP
- UTRESP

Non-Governmental Organizations

- Action Aid Mozambique - LOVE

- AMMCJ - ARK - Absolute Return For Kids
- Blood Diamond Charity Fund - Care International
- center Studies Democracy - Center for Public Integrity
Development
- CNCS - Christian Council of Mozambique
- Belgian Technical Cooperation - Department For International Development
- Royal Danish Embassy - Women's Forum
- FCC - HelpAge International
- Portuguese Institute in Support to the - KULIMA
Development
- Doctors With Africa - OTM
- MONASO - SINAFP National Public Service Union
- Industrial Chemical Workers Union - Skillshare International
- Swedish Embassy - United Nations Development Program
- GAS Groups Africa Sweden - PRAY
- UNFPA - VETAID Mozambique
- Nweti - UNICEF

Extraction of Natural Resources

- ABM RESOURCES NL - Southern Africa Mining

- Mozambique Mining Group - Capitol Resources.
- Companhia Mineira do Gilé - Mozambique Zimbabwe Pipeline Company
- Drilling Resources Mozambique - SASOL
- Tantalum Mining - Mamba Minerals

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Telecommunications, Media and Technology

- British Telecom - Business Connection

- Bytes & Pieces. - Cilix Software
- DCC - Nokia International
- Radio Maria Mozambique - SATA Southern Africa Telecom Association
- SIEMENS - Tiga
- TIM - Independent Television of Mozambique

Hotel and Tourism

- Atoz Tourism - Benguerra Lodge
- Big Blue - Blue Water
- Rex House - Mozambican Hotel
- Matopo Fix - Fisherman
- Sanctuary Hotels - Paradise Village
- Vilankulos Beach Lodge

services

- BEIRANAVE - Cinemate
- CONSULT - CONSULTEC
- CUDHA, SARL - Executive Protection
- FHBertling Logistics - GNLD International
- Golder Associates - H.Gamito, Couto and Associates
- Impact - JV Consultores
- MHM - Mozambique Diesel Electric
- Momentum Exp - Omega Security
- Rohlig Grindrod. - Select Vedior Mozambique
- SELMEC - SMI Society Mozambican in
Investment
- SOPREL (ISCTEM) - STM - Terminal Society
- Supaswift Mozambique. - TCM - Cabotage Terminal
- Trio Data Mozambique. - UDM Technical University of Mozambique

Construction and Real Estate

- Acosterras Mozambique - Matola Citadel

- CPG Civil & Planning Group - ECMEP NORTH
- Edimetal - EMOCIL
- Ergogest - Foster Wheeler
- Hooper & Louw - Leirislena
- Single phase - Mota Engil
- Murray & Roberts - OPCA
- PREDIMO - Racegame Mozambique
- RIOLITES - SGIS-Sociedade Geral Investimentos Serviços

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CONTACTS
Av. 25 de Setembro, 1230,
3rd Floor Block 5 CP 4200
Maputo
Republic of Mozambique

Phone: + 258 21 300720

Email: [email protected]

www.bdo.co.mz

BDO Lda., a Mozambican limited liability company, is a member of BDO International Limited, an English
company limited by guarantee, and is part of the international network of independent BDO firms.

BDO is the brand of the BDO network and each of its member firms.

Copyright © BDO Lda. All rights reserved.

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