Corporate - Group taxation

Last reviewed - 21 April 2023

Group taxation is not permitted in Malawi.

Transfer pricing

There are transfer pricing regulations in Malawi. The legislation requires taxpayers to have mandatory contemporaneous transfer pricing documentation. Malawi transfer pricing regulations follow the Organisation for Economic Co-operation and Development (OECD) transfer pricing guidelines.

The transfer pricing legislation further provides for the definition of related parties, as well as general transfer pricing regulations.

There is also a tax anti-avoidance provision that is used to check transactions between related parties. If transactions between related parties result in profits that are lower than what would be expected if the company was trading with an independent party, then the tax authorities can challenge the transaction.

Thin capitalisation

There are thin capitalisation rules in Malawi. The rules set an acceptable debt-to-equity ratio of 3:1. Consequently, interest deductibility is limited to this threshold.

Controlled foreign companies (CFCs)

There is no CFC regime in Malawi.