Malawi – Digital Services in Scope: VAT Rules for Non-Resident Digital Service Providers 

Background 

We have shared earlier, through our March tax insights concerning Malawi, that the Government is preparing the introduction of the VAT regime for non-resident digital service providers. Parliament has passed a set of revenue laws to boost public revenue. 

One of the adopted Laws, to strengthen the fiscal framework and expand the government’s revenue base, is the Value Added Tax (Amendment) Bill (No. 5 of 2026). The VAT amendment bill was presented to the Parliament, with the main emphasis on the expansion of the taxability scope to non-resident digital service providers. 

Timeline 

The Bill entered into force on April 15, 2026. 

Scope of VAT Rules for Non-Resident Digital Service Providers

The amendment to the VAT Act came into force on April 15, 2026. Considering that, for now, there hasn’t been any mention of the transitional period, the new taxability framework established for overseas providers of digital services came into effect on the same day. 

Registration for VAT 

Non-resident providers of digital services to end customers should register for VAT based on the information that has been provided, from the commencement of their activity in Malawi. 

Taxable persons in scope 

The scope of persons responsible for registering for VAT is defined very broadly in the VAT Amendment Act. It covers most of the economic operators that provide digital or remote services, including intermediaries, and e-commerce marketplaces. 

It also covers streaming service providers, digital advertising providers, and cloud-based service providers. 

Taxable services 

‍The adopted Bill embraces a wide definition of “digital services”, such as:

• streaming services,
• cloud computing,
• software downloads and subscriptions,
• online advertising,
• digital marketplace facilitation,
• e-books and online publications,
• mobile applications and in-app purchases.

Taxable transactions 

The adopted bill clarifies that VAT collection responsibility for non-resident digital service providers should cover B2C transactions. 

VAT rate in Malawi: VAT rate for digital services is fixed at 17.5%. 

Digital Marketplace VAT rules 

The amendment also mandates that marketplace facilitators and intermediaries, who facilitate digital services in Malawi, can be labelled as deemed suppliers, i.e., accountable for VAT compliance obligations instead of underlying suppliers. Non-resident suppliers must register regardless of the revenue threshold. 

How to Stay Compliant 

The Malawi VAT regime for non-resident providers of digital services entered into force.

We have continuously followed the legislative updates concerning the introduction of the VAT regime for overseas providers of digital services. So, we are up-to-date.

The advisory role offered by 1stopVAT for these providers extends from understanding the threshold exposure for registration, accountability for VAT, assistance with the return preparation, and remittance of the owed tax.

Where we cannot manage your VAT requirements directly, we have a great network of local tax agents who will take care of this. 

In addition to successfully managing your registration, we offer additional services for digital service providers in Malawi, such as: 

• Assistance with Tax Reporting(preparation of returns, filing, and remittance)
• Tax Advisory and Ongoing Tax Management
• Correspondence with Tax Authorities 

Takeaway 

Frequently Asked Questions