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The Maputo City Tax Court has concluded its review of Galp’s appeal against a €151.5 million capital gains tax assessment related to the sale of its stake in Area 4 of the Rovuma Basin.
The second and final hearing took place on Thursday, September 24, and focused on closing arguments presented by lawyers representing both sides.
With this session completed, the evidentiary phase has ended and the case now moves toward a court decision.
The first hearing was held on August 19 and was aimed at gathering evidence to help the court determine whether the tax calculated by the Mozambique Tax Authority was assessed in accordance with Mozambican law.
The dispute stems from the sale of Galp’s 10% stake in Area 4 of the Rovuma Basin to ADNOC, a transaction that marked the Portuguese energy company’s exit from the natural gas project.
Following the transaction, the Tax Authority concluded that a taxable capital gain had been generated and demanded payment of $175.9 million, equivalent to around €151.5 million.
Galp disputes the amount, arguing that the taxable base determined by the authorities is excessive and that there is no legal basis for the assessment as presented.
The domestic court case is running in parallel with an international arbitration initiated by Galp against the Mozambican State.
The international dispute was registered with the International Centre for Settlement of Investment Disputes, part of the World Bank Group, and also concerns the taxation of the sale of Galp’s stake in Area 4.
Galp based its international claim on investment protection agreements involving Portugal and the Netherlands, while the Mozambican Government has maintained that the taxes claimed by the State must be paid.
With the hearings in Maputo now concluded, the case enters a decisive phase, pending a ruling on whether the Tax Court will uphold the assessment issued by the Tax Authority or accept Galp’s position in whole or in part.
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