Future sales of assets in Mozambique owned by foreign companies will be subject to a 32 percent capital gains tax starting in 2014, said the chairman of the Mozambican Tributary Authority.
So far sales of local assets were subject to a sliding rate, which varied according to the amount of time the assets had been owned by the company selling the asset, which is why Irish company Cove Energy paid just 12.8 percent when in sold its 8.5 percent stake in the Area 1 block in 2012 to Thailand’s PTT Exploration and Production.
Last year Mozambique’s parliament approved a change to the tax regime stipulating that sales of assets owned by non-resident companies would be charged a flat rate of 32 percent. This change had been awaiting the president’s approval.
Speaking to financial news agency Reuters, Rosário Fernandes said that constitutional considerations had been overcome and that the President had approved the law, which meant that as of 1 January 2014 “capital gains from the sale of assets at all large projects, including oil and gas, will be taxed according to the new legislation.”
Italian group ENI recently agreed to pay the Mozambican government US$400 million in taxes and to build a thermal power plant costing US$130 million for the sale of a stake in the Area 4 block to the China National Petroleum Corporation (CNCP) for US$4.2 billion.
A few days ago US oil group Anadarko Petroleum agreed to sell 10 percent of its 36.5 percent stake in the Area 1 block to India’s Oil & Natural Gas Corp (ONGC) for US$2.64 billion in cash.
In June the ONGC group ad Indian state company Oil India reached an agreement with Indian company to but a 10 percent stake in the same block for US$2.48 billion, whilst Norwegian group Statoil sold 25 percent of a prospecting license to Japan’s Inpex for an undisclosed figure. (macauhub)