Taxation can be avoided or reduced under an applicable tax treaty. Where foreign income has been taxed abroad, the CIT Code establishes a tax credit method to eliminate international double taxation; That is, income received abroad is included in taxable income, but a tax credit may be granted by deduction from the CIT payable. The credit should be the lowest of the following amounts: tax credits are available for taxes on foreign income in order to avoid or reduce international double taxation. There are no exceptions or reductions with regard to the taxation of capital gains in Mozambique, including profits from the sale of shares (Mozambique does not have a participation exemption for capital gains). Interest payments, including participations of a resident company in a non-resident with whom they deal, are subject to a withholding tax of 20%. However, withholding tax may be reduced or abolished under an applicable double taxation convention. Most of Mozambique`s double taxation treaties have a reduced rate of 10 per cent, with the exception of those with Mauritius and South Africa, where withholding tax has been reduced to 8 per cent. The Transfer Pricing Regulations provide that, where a third country makes a transfer pricing adjustment in respect of a transaction that may result in double taxation in Mozambique (contrary to international rules agreed by Mozambique), the Mozambican tax authorities may make a compensatory adjustment, provided for in a double taxation convention concluded by Mozambique and if: 1996, 1994, 1995, 1 As regards domestic transactions, this compensatory adjustment is provided for in the Mozambican Income Tax Code, but the procedures to be followed are not explicitly defined in the transfer pricing rules. Mozambique has concluded agreements for the avoidance of double taxation with Portugal, Italy, Mauritius, the United Arab Emirates, macao Special Administrative Region, South Africa, India, Vietnam and Botswana. Mozambique has concluded double taxation agreements (DTT) with the following countries: foreign and domestic private investment offers a number of benefits, including deductions from the corporate tax base (IRPC) and exemptions from customs duties on imports. The minimum amount of foreign direct investment eligible for the purposes of the above-mentioned benefits corresponds to 2,500,000 Meticais (about 71,500 euros). Tax benefits include: (i) exemption from customs duties and TAX on imports of capital goods of category “K” of the Customs Tariff; (ii) investment tax credit; (iii) acceleration of depreciation and reintegration; (iv) deductions from the tax base for investments in the modernisation and introduction of new technologies; and (v) deductions from the tax base for investments made in the field of vocational training; (vi) Exemption or reduction of the IRPC tax rate and (vii) exemption from VAT for the taxation of goods. .