Mozambique – VAT: Amendment of the Value Added Tax Code

In brief

Law 10/2025, of 29 December, published in the Official Gazette No. 248, introduced a series of amendments to the Value Added Tax (VAT) Code, approved by Law No. 32/2007, of 31 December, and respective subsequent amendments.

The law amends Articles 3, 6, 12, 18,19, 21, 23, 25, 26, 27, 31, 32, 33, and 34 of the VAT Code, and adds new Articles 25‑A and 53.

The amendments introduce rules for the taxation of digital goods and services, define criteria for determining the location of transactions and for taxing non-residents, and provide for a proportional deduction when the taxable base is reduced.

In detail

Main highlights:

• Digital Economy Taxation: Classification of digital goods and digital services subject to VAT, including those supplied by non-residents. New VAT compliance procedures to be implemented through regulations.
• Elimination of Exemptions on Imports: Includes sugar, oils, soaps, and solar panels. The exemptions on internal sales of such goods expired on 31 December 2025.
• Limitation of the right of deduction of VAT for transactions with a reduced taxable base; Including the supply of electricity, aeronautical charges, public works, and the supply of drinking water. 
• Exclusion of the right to claim VAT for transactions subject to the reduced 5% rate. 
• VAT refunds: Introduction of a new 150-day deadline for payment of refunds and ia 10-year limitation period for VAT credit refund applications. 
• Elimination of the obligation to claim a refund for credit accumulated over 12 months.
• Deadlines: By the 10th of the following month for digital transactions.  
• Declaration of Isolated Operations; It is now mandatory to report transactions with non-resident entities in the isolated operations return. This return will be required for compliance with the VAT self-assessment, which will entail payment of VAT on behalf of non-residents.
• Revenue reporting per establishment. 
• Elimination of special regimes: Elimination of the simplified and exemption regimes. 

This Law entered into force on 1 January 2026. The Government has 180-days to approve the regulations under this law.

^{© 2026 PwC. This communication is of an informative nature and intended for general purposes only. It does not address any particular person or entity nor does it relate to any specific situation or circumstance. PricewaterhouseCoopers Tax Services TLS, Lda. We will not accept any responsibility arising from reliance on information hereby transmitted, which is not intended to be a substitute for specific professional business advice.}