Mozambique: VAT Amendments and Special Regimes Approved by Council of Ministers

Key VAT-Related Changes

• Draft Law Amending the VAT Code
  • Objective: Broaden the tax base by including digital economy transactions under VAT scope.
  • Modernization Measures:
    • Eliminate distortions and ensure parity between tax assessment and deduction rights.
    • Introduce streamlined electronic procedures for invoice submission.
  • Impact: Businesses engaged in e-commerce and mobile wallet transactions will now fall under VAT compliance obligations. [360mozambique.com], [africa-press.net]
• Special VAT Refund Regime for Mining and Petroleum Sectors
  • Amendments to VAT Refund Regulation introduce a special regime for companies in mining and oil sectors.
  • Key Features:
    • Extends eligibility to companies in exploration, research, and development phases (previously limited to production).
    • Allows subcontractors and special-purpose entities under concession contracts to benefit.
    • Mechanism: Use of Regularization Notes instead of upfront VAT payments, improving cash flow for qualifying entities.
  • Conditions: Prior authorization from tax authorities and compliance with investment thresholds (e.g., $25 million for early-phase projects). [dlapiperafrica.com], [rsm.global], [mirandalawfirm.com]

Additional Context

• The VAT Code amendment aligns with Mozambique’s broader tax reform agenda, which includes updates to Customs Tariff, Excise Tax, and Income Tax Codes.
• These changes aim to modernize tax administration, enhance transparency, and adapt to the growing role of digital transactions in the economy. [360mozambique.com]

External Resources for Further Reading

• • Government Approves Law Amending the VAT Code – Africa Press [africa-press.net]
  • President Submits Proposals to Parliament to Update Various Tax Laws – 360 Mozambique [360mozambique.com]