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Experts back Mozambique tax decision for complex Eni-Exxon gas deal


Independent tax experts have endorsed the Mozambican Tax Authority’s calculations for the capital gains tax levied on Eni’s sale of a stake in its Area 4 gas block to ExxonMobil through an Italian-registered holding company.

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1 Comment

  1. Omotunde Mahoney on

    I am not entirely convinced by the explanation offered by your tax experts, backing the calculations of the Autoridade Tributaria.
    Article 29(1) of RETBAF – the regime for the upstream petroleum sector, provides specifically that capital gains realized by a non-resident entity from the transfer of rights to oil or gas assets are subject to a taxation at a rate of 32%.
    In his presentation last Tuesday, Mr. Anibal Mbalango invoked Article 45 of the IRPS as providing for a 50% discount on the relevant tax liability. However, this provision simply establishes a reporting obligation for persons entitled to exemption from withholding or other tax concessions and seems entirely irrelevant.
    I note that IRPS Article 40, which one expert cited as providing for a rebate of tax 50% in respect of sales of immovable property, seems of equally doubtful relevance since the ENI-Exxon transaction involved the transfer of shares in the special purpose company through which ENI’s ownership interest in Area 4 is held. This asset does not, by any standard qualify as immovable property.
    I note in passing that in the version of the IRPS posted on the ATM’s website, the subject of Article 40 is in fact ‘Cessacao de actividade’, which is even further removed from our focus.
    I would be grateful for any clarification the relevant experts are able to provide.

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