Maputo, Sept. 24, 2026 (Lusa) - The Maputo City Tax Court concluded its hearing on Thursday of Galp's appeal against the demand for €151.5 million in capital gains tax on the sale of its gas stake.
A source close to the case told Lusa this was the second and final hearing, which included closing arguments from both sides this morning.
The first session took place throughout the day on 19 August at the same court; in this case, the Mozambican Tax Authority (AT) argues it assessed the tax in accordance with the law.
«This is a contentious appeal, lodged by Galp, challenging the amount of capital gains tax assessed by the AT,» a source linked to the Mozambican tax authority's defence team told Lusa at the time, as they left the court.
The hearing is preliminary and aims to present evidence of the facts, «so that the court has the best possible basis on which to decide whether the tax was assessed in accordance with the law».
This is one of the largest tax disputes relating to Mozambique's extractive sector, running in parallel with international arbitration proceedings, also initiated by the Portuguese oil company; it therefore constitutes a case of lis pendens, where the same matter is before more than one tribunal (tax and arbitration).
Before a final decision, the case has, to date, gathered enough details for the court to decide whether the demand for payment of $175.9 million (€151.5 million) issued by the AT complied with Mozambican legislation or whether the Portuguese oil company is in the right.
The case stems from the sale by Galp Portugal Holdings B.V. and Galp East Africa B.V., of their entire shareholdings in Galp Rovuma to the Abu Dhabi National Oil Company (ADNOC), a transaction that marked the Portuguese oil company's exit from the Area 4 natural gas project in the Rovuma Basin, in northern Mozambique.
«The AT issued a capital gains tax assessment. The AT notified Galp; Galp lodged an appeal with the Tax Court in accordance with the procedural rules in force in the Republic of Mozambique,» said the same source at the AT.
The transaction yielded Galp more than €760 million, according to information the company previously released, and the AT concluded that a taxable capital gain arose under the tax regime applicable to oil and gas operations in Mozambique.
Galp is contesting the amount claimed, arguing that the taxable base the AT considered is excessive and that the tax due should be substantially lower.
According to the source from the AT's defence team, today's hearing aimed to gather details to enable a judicial decision on the dispute: «Evidence has been presented, and we will await the subsequent proceedings».
Lusa reported in August that Galp based its international arbitration case against Mozambique on the bilateral investment treaties signed with Portugal and the Netherlands, which provide mechanisms to resolve disputes between investors and states.
The dispute, registered on 26 June with the International Centre for Settlement of Investment Disputes (ICSID), an institution of the World Bank Group, pits Galp Energia SGPS (Portugal), Galp Energia Portugal Holdings B.V. and Galp East Africa B. V. (both headquartered in the Netherlands) against the Republic of Mozambique, in case ARB/26/31, according to the case update.
Mozambique's government reiterated in July that Galp must pay the taxes the state claims.
«What the government is saying is that it has to be paid. That is all. It is the Mozambicans' right. It is a national resource and must be paid,» stated the spokesperson for the cabinet, Inocêncio Impissa.
Impissa acknowledged, however, that arbitration could help bring positions closer together, arguing that, where interpretations differ, it is up to the arbitrator to analyse the arguments and evidence each party presents.
Meanwhile, Galp's co-chief executive, João Diogo Silva, stated in October 2025 that the company saw no legal basis for the tax claim submitted by the Mozambican authorities, whilst expressing a willingness to seek a negotiated solution to the dispute.
PVJ/ADB // ADB.
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