Malawi Revenue Authority

Partnership

A partnership is a business relationship in which two or more individuals contribute money, skills and other resources and share in the profits and losses in accordance with terms of the partnership agreement. Partnerships may be incorporated or unincorporated.

A partnership earns various types on income including interest, dividends, rentals and capital gains. Income tax is charged and paid for each year of assessment on the income received by, accrued to any individual from a source within, or deemed to be within Malawi.

Tax is charged and paid on the individual’s total taxable income. Individuals are taxed using progressive tax rates and as far as the current annual income rates are concerned, the first K540, 000 is taxed at 0%, the next K60, 000 is taxed at 15% and the excess is taxed at 30%.

Section 74 (1) of the Taxation Act stipulates that persons carrying on any trade in a partnership shall make a joint return in respect of their trade and each partner shall be separately and individually liable for rendering of the joint return.

Furthermore, the Taxation Act provides that partners in the partnership shall be liable to income tax only in their separate individual capacities and separate assessments shall be made upon them.

A partnership is not a taxable entity for income tax purposes. The accounting period for partnerships and individual partners is from July to June the following year.

Feedback: tax@mra.mw; 0888 986 200, 0888 958 220