On 9 December 2025, Mozambique and Portugal signed a protocol in Porto to amend and update the existing Mozambique - Portugal Income Tax Treaty (originally signed in 1991 and previously amended by a protocol in 2008). The amending protocol represents a bilateral initiative to adapt treaty provisions to current international tax standards.1,2
WHY THIS MATTERS
The signing of this amending protocol is significant for organizations and individuals engaged in cross-border activities between Mozambique and Portugal. Updates to income tax treaties can affect withholding tax rates, permanent establishment definitions, tax residency criteria, and dispute resolution procedures.
Key Highlights
- The protocol reflects ongoing efforts to bring the treaty into alignment with contemporary international tax standards and addresses the evolving cross-border business environment.
- Specific amendments to the treaty text, including potential changes to withholding rates, definitions, and dispute resolution mechanisms, have not yet been released.
- The signing signals continued cooperation between Mozambique and Portugal on tax matters affecting global mobility and cross-border investment.
KPMG INSIGHTS
In light of the upcoming changes organisations, entities, and individuals might consider the following:
- Organisations may wish to monitor forthcoming official releases and assess the impact of any treaty amendments once details are published.
- Organisations may wish to review current cross-border compensation structures and assignment policies to facilitate continued compliance and appropriate tax outcomes following the protocol’s ratification.
- HR leaders, payroll managers, and globally mobile employees may need to review compensation arrangements, employment contracts, and tax compliance processes.
If assignees and/or their programme managers have any questions or concerns about the scope of the amending protocol, its potential application and impacts, they should consult with their qualified tax professional or a member of the GMS tax team with KPMG in Portugal (see the Contacts section).
FOOTNOTES:
1 “The 6th Portugal-Mozambique Summit has now begun,” Governo da República Portuguesa, Portuguese Government Portal, published on 9 December 2025.
2 See (in Portuguese) “Protocol between the Portuguese Republic and the Republic of Mozambique that reviews the Convention on the Avoidance of Double Taxation regarding Income Taxes and Prevention of Tax Evasion),” Diplomatic Portal, Portuguese Government Portal, updated on 24 March 2008.
Contacts
Disclaimer
The information contained in this newsletter was submitted by the KPMG International member firm in Portugal.
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