Malawi operates a source-based (territorial) tax system: corporations are taxed only on Malawi-source income, with both Malawi-source and foreign-source dividend income specifically excluded from taxable income. Malawi-registered companies pay the standard 30% rate; branches of foreign companies (non-residents with a Malawi permanent establishment) previously paid 35%, but this was reduced to match the same 30% rate under the 2025/2026 Budget, effective April 1, 2025 - administered by the Malawi Revenue Authority.
The tax year generally follows the company's own accounting period. Companies licensed to operate in an Export Processing Zone are taxed at 0%, and qualifying assets in the manufacturing, agricultural, and tourism sectors are eligible for a 100% first-year investment allowance.
30% standard rate.
Top marginal rate 40%.
16.5% standard rate.
A company is resident in Malawi if incorporated in Malawi; a trust, estate, or partnership is resident if established/organized under Malawian written law; where a permanent establishment exists, tax residence follows. Malawi operates a source-based (territorial) system: corporations are taxed only on Malawi-source income - taxable income comprises Malawi-sourced receipts and accruals (including capital gains), with both Malawi-source and foreign-source dividend income specifically excluded from taxable income.
A non-resident company with a permanent establishment in Malawi is subject to Malawi corporate income tax on the income attributable to that establishment, at the standard corporate rate (reduced to 30% from 35% under recent reform). Non-resident income from a Malawi source that is not attributable to a Malawi permanent establishment is instead collected through final withholding tax (15% on management fees and similar payments).
No CFC rules were identified in available sources - consistent with Malawi's underlying territorial/source-based tax structure, where foreign-source income generally falls outside the Malawian tax net for corporations regardless of any CFC-style attribution mechanism.
Malawi introduced thin capitalization rules effective July 1, 2018, limiting the debt-to-equity ratio to 3:1 for all controlled transactions (not limited to shareholder loans).
Malawi classifies entities under its own domestic tax law rather than offering an elective check-the-box system, and no ATAD2-style anti-hybrid mismatch regime addressing double-deduction or deduction-without-inclusion outcomes has been identified, consistent with Malawi having no CFC regime and no participation exemption or holding company regime of any kind.
No domestic FBAR-equivalent regime requires Malawi residents to separately disclose foreign financial accounts, and Malawi is not currently a CRS participating jurisdiction, so it does not automatically exchange financial account information with foreign tax authorities under the OECD's Common Reporting Standard. US persons remain independently subject to FinCEN Form 114 (FBAR) and potentially Form 8938 regardless of Malawi's own rules.
Malawi has no participation exemption regime and no holding company regime, per a primary tax-guide source explicitly confirming both as absent. Malawi-source and foreign-source dividend income are both excluded from taxable income under the general territorial income rules described above, which functions similarly to an exemption in practice even though Malawi does not frame it as a distinct participation exemption regime tied to minimum ownership thresholds.
Malawi allows a foreign tax credit against income taxed both in Malawi and a foreign country, even in the absence of a tax treaty, subject to satisfactory evidence of the foreign tax paid; the credit may not exceed the Malawi tax on that income determined at the average effective rate for the taxpayer's total taxable income.
Malawi has entered double tax treaties with France, Kenya, the Netherlands, Norway, South Africa, Sweden, Switzerland, and the UK - though the Kenya treaty is not operational, and the Netherlands treaty was suspended effective January 1, 2014 (a new treaty was under negotiation as of the most recent verification). A Denmark treaty has been concluded but not yet promulgated, and Malawi-Mauritius treaty negotiations were ongoing. Malawi has not yet ratified the OECD's Multilateral Instrument (MLI).