Malawi: Nonresident digital services providers to register for VAT
Effective April 15, 2026
Malawi in April 2026 published the VAT (Amendment) Act 2026, which, among other things, introduces a requirement for nonresident digital services providers to register for and collect VAT, effective April 15, 2026.
Scope
Digital services are defined as automated services supplied over the internet or an electronic network, the supply of which is automated and requires minimal human intervention, and include:
- Streaming of videos, music or games
- Cloud computing
- Software downloads and subscriptions
- Online advertising
- Digital marketplace facilitation
- E-books and online publications
- Mobile applications and in-app purchases
Business‑to‑business (B2B) vs. business‑to‑consumer (B2C)
The digital services provisions apply to “recipients” in Malawi. In this respect, the definition of “recipient” is limited to a non-taxable person, indicating that the rules target supplies to end users rather than taxable businesses.
Customer location
The Act does not include any specific geolocation criteria but merely states that the sale of digital services is sourced to Malawi if the recipient is resident or established in Malawi, regardless of the place of contract or payment.
Marketplace/platform rules
The Act appears to shift VAT obligations to electronic marketplace operators and intermediaries. In this respect, the Act defines “electronic marketplace operator” as a person who operates a digital platform that facilitates the sale of digital services to recipients in Malawi. “intermediary” is a person who facilitates the sale of digital services provided by a digital services provider to recipients in Malawi and who is responsible for issuing the invoices and collecting payment for the sale.
Registration
A non-resident digital services provider or an intermediary or an electronic marketplace operator, whether or not the taxable sales meet the gross receipts threshold of MWK 50 million per annum.
VAT deduction
The Act clarifies that nonresident digital services providers are not allowed to deduct VAT.
VAT invoicing
The Act does not include any specific provisions that address invoicing requirements. However, the VAT law imposes a VAT invoicing requirement on all sales without making any specific exceptions for B2C transactions. Therefore, nonresident digital services providers would likely be required to issue VAT invoices.
Penalties
Penalty provisions in the general VAT law would apply.
Implementation timeline
The Act does not include any specific transitional rules. Therefore, the new VAT provisions relating to nonresident digital services providers should be effective April 15, 2026.
For more information, contact a KPMG tax professional:
Philippe Stephanny | philippestephanny@kpmg.com
Chinedu Nwachukwu | chinedunwachukwu@kpmg.com
Bridget Hill-Zayat | bhillzayat@kpmg.com