Malawi Corporate Tax Guide 2026

Overview — Corporate Tax in Malawi

Corporate tax in Malawi is governed by the Taxation Act and administered by the Malawi Revenue Authority (MRA). A company is tax resident if it is incorporated under Malawian law or if its place of effective management is in Malawi. Resident companies are taxed on worldwide income; non-resident companies with a permanent establishment are taxed on Malawi-source income only. Companies must register for tax with MRA and obtain a Taxpayer Identification Number (TPIN). The tax year aligns with the fiscal year (July to June), though companies may apply for a different accounting period with MRA approval. Annual returns are due within six months after the end of the accounting period.

Standard Corporate Tax Rate — 30%

The standard CIT rate for resident companies in Malawi is 30% of chargeable profits. Non-resident companies with a permanent establishment in Malawi are also taxed at 30% on Malawi-source income. Taxable profit is computed as gross revenue less allowable deductions including operating expenses, capital allowances (depreciation), interest costs, and losses carried forward. Losses may be carried forward for up to 6 years. Capital gains are included in ordinary income and taxed at the CIT rate.

Small Companies — 25% (Turnover < MWK 2B)

Companies with annual turnover not exceeding MWK 2 billion benefit from a reduced CIT rate of 25%. This concession is designed to reduce the tax burden on small and medium-sized enterprises (SMEs). To qualify, the company must be a resident company and its gross turnover for the year must not exceed MWK 2 billion. The reduced rate applies to the entire chargeable profit, not just the first MWK 2 billion of turnover. Companies that grow beyond the threshold in a subsequent year revert to the standard 30% rate.

Branches of Foreign Companies

Foreign companies operating through a branch in Malawi are taxed at 30% on Malawi-source profits. Branch profits remitted to the head office are subject to a branch profit remittance tax. Foreign companies may prefer to incorporate a Malawian subsidiary to access the standard corporate tax regime.

Capital Allowances

Malawi uses a capital allowance system rather than book depreciation for tax purposes. Rates vary by asset category:

• Industrial buildings — 10% per annum (straight-line)
• Plant & machinery — 20% per annum (declining balance)
• Motor vehicles — 20% per annum (declining balance)
• Computers & office equipment — 33.3% per annum (declining balance)
• Farm improvements — 20% per annum

FAQs

What is the penalty for late filing of corporate tax returns?

Late filing attracts a penalty plus interest on unpaid tax. Additional penalties may apply for failure to maintain proper records or for tax evasion.

Can foreign companies claim treaty relief?

Yes, Malawi has double tax treaties including with the UK, South Africa, and others. Treaty relief may reduce withholding tax rates on dividends, interest, and royalties paid to non-residents.

Is there a minimum tax for loss-making companies?

Malawi does not have a turnover-based minimum tax. Loss-making companies may carry forward losses for up to 6 years against future profits.

Disclaimer

This guide provides general information about Malawian corporate tax for the 2026 tax year. Tax laws and rates may change. Always consult with a qualified Malawian tax advisor or the Malawi Revenue Authority for advice specific to your situation. InvestmentKit does not provide tax advice.