Mozambique’s tax reform covers streaming, data, social media and more

At issue is a law, which under proposal by the Government alters the Personal Income Tax Code (IRPS), within the scope of the tax reform approved in December by Parliament. Although published in the Official Gazette (Boletim da República), the Government still has 180 days to regulate the changes.

Among the changes, the article on income was amended to include those “derived from the transfer of goods or provision of digital services, carried out or used in Mozambican territory, when owed by entities located or resident in Mozambique.” The legislation defines “digital goods” as “intangible assets represented, stored or transmitted in electronic format, endowed with economic value, and susceptible to appropriation, ownership, control, transfer or licensing by digital means.” Also included in the amended Personal Income Tax (IRPS) legislation are “digital services, intangible prestations (services) carried out by electronic means,” such as those “provided through software, platforms, networks, algorithms or digital infrastructures, which allow the user to access, generate, process, store, communicate or enjoy information, as well as to perform operations or transactions remotely, regardless of the location of the parties.” “They include automated services or services provided with minimal or no human intervention, including access to platforms, applications made available as a service (SaaS – Software as a Service), cloud computing services, media and streaming services [television content], digital financial services, digital intermediation, and any remotely provided electronic functionalities that are equivalent,” it adds. The ongoing tax reform in Mozambique also involves changes to the customs tariff, the Value Added Tax (VAT) Code, and the Corporate Income Tax Code (Imposto sobre os Rendimentos das Pessoas Coletivas – IRPC), measures that the Tax Authority (Autoridade Tributária) acknowledges may significantly contribute to the forecast increase of 15 billion meticais (€200 million) in tax revenues in 2026.