Resident companies are subject to corporate income tax at the standard rate of 30%.

However, other rates apply as follows:

In the case of a mining company, an additional resource rent tax at the rate of 15% is levied on the after-tax profits if the company’s rate of return exceeds 20%. The basis for calculating rate of return has not been defined;
33% for cellular phone operators;
0% for companies in priority industries, which include agricultural produce processing and power generation and distribution companies for a period not exceeding 10 years, and a 15% corporate tax rate thereafter;
Companies in export processing zones are exempted from paying corporate income tax; and
Effective 1 July 2016, income tax is imposed on income from life insurance business at the rate of 30% (previously 21%). Further, the exemption previously available to life insurance companies on their investment and leasing income has been repealed.

Dividends

Dividends received from resident companies are subject to a final withholding tax of 10% on their gross amount to be withheld by the distributing entity and are exempt at the level of the corporate recipients (dividends from foreign sources are exempt under the territoriality system).

Capital Gains

Capital gains derived by companies are subject to tax at the standard corporate income tax rate. However, gains are not subject to tax if a qualifying replacement asset is purchased within 18 months of the disposal (see Sec. 5.1.).

Presumptive Tax on Turnover

Effective 1 July 2021, presumptive tax on turnover is introduced for small businesses with turnover up to MWK 12.5 million per year that is payable as follows:

Income (in MWK)	Presumptive Tax (in MWK)
Up to 4 million	0
Over 4 million up to 7 million	110,000
Over 7 million up to 10 million	170,000
Over 10 million up to 12.5 million	255,000

The presumptive tax does not apply to rental income, management, professional and training fees, incorporated companies, or income subject to final withholding tax. Taxpayers subject to presumptive tax also have the option to elect for the standard taxation regime.

Resident Withholding Tax Rates

Payments to residents are subject to withholding tax as per the rates in the table below. However, in this case, the withholding tax is merely a prepayment towards the recipient’s corporate tax liability on the income received. There is an exemption from withholding tax on payments made to resident "compliant taxpayers", being those who settled all their tax liabilities with the tax authorities, including customs and excise.

Nature of payment	WHT (%)
Royalties	20
Rents	20 (increased from 15%, effective 22 November 2019)
Payment for any supplies to traders and institutions for foodstuff	3
Payment for any other supplies to traders and institutions	3
Commissions	20
Payment for carriage and haulage	10
Payment for tobacco and other products over MWK 60,000	7
Payment to contractors and subcontractors of any category in the building and construction industries	4
Payment for public entertainment	20
Payment for casual labor over MWK 35,000	20
Payment of services	20
Interest	20
Fees	20 (increased from 15%, effective 22 November 2019)
Payment for tobacco sales over 1,200 kilograms or 10 bales sold at auction floors	3

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