Taxation System in Malawi - Malawi Confederation of Chambers of Commerce and Industry

General Taxation
Generally, all types of businesses and personal income in Malawi are taxable. Other taxes include real property taxes, surtaxes, fringe benefit taxes, and withholding provisional taxes.

Taxable Income Sources
The following sources of income are taxable:

Gains and profits from trade and business
Gains and profit from employment
Dividends and interest
Rents and royalties
Pensions, annuities, or other periodic payments, and
Fringe benefits

Indefinite loss carry-forwards are allowed on unabsorbed losses.

Company/Business Tax
Income occurring in Malawi or derived from Malawi, whether or not the company is resident, is taxable. However, income earned outside Malawi by a resident company is not taxed in Malawi. A resident company is defined as a company registered and incorporated in Malawi.

Personal Income Tax
Income occurring or derived from Malawi is subject to tax for all individuals, except for company representatives who work only part time in Malawi. Income earned abroad by Malawi residents is not taxed in Malawi.

Capital Gains Tax
Malawi has no specific capital gains tax. All capital gains are considered as either personal or business income that is taxed at the applicable personal or corporate rates.

Value Added Tax (VAT)
Consumers pay no sales tax but indirectly pay the surtax that is levied on all goods at the manufacture level

Withholding Tax
Withholding tax on payments to non-residents, including royalties, interest rents, and services, is assessed at a flat rate of 10 percent.

Double Taxation Agreements
Double Taxation Agreements provide for the avoidance of double taxation on international income such as earning, dividends, interest, and royalties that are derived in one country and remitted to another country. Malawi has double taxation agreements with the following countries: Denmark, France, Kenya, The Netherlands, Norway, South Africa, Sweden, Switzerland, and United Kingdom.

The agreements call for the reduction of withholding taxes on remittances and payments on respective balances.

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