Major taxpayers that are members of an economic group may opt to be taxed under the tax regime of group taxation.
The option for the group taxation regime is available when:
- The company is included in the major taxpayers list.
- The parent company holds, directly or indirectly, at least 90% of the share capital of other companies (controlled entities), and more than 50% of the voting rights.
Some limitations apply, and the option to apply group taxation depends on the approval of the tax authorities.
In October 2013, specific transfer pricing legislation was enacted in Angola. Although the Presidential Decree 147/13 was published on 1 October 2013, its provisions should be applicable for tax years started on or after 1 January 2014. This legislation imposes rather demanding obligations on the taxpayer.
According to Angola’s transfer pricing requirements, a transfer pricing documentation file must be prepared and delivered within six months after the closing date of the fiscal year by taxpayers (all the taxpayers and not only the Large Taxpayers, according to Law 26/20, of 20 July 2020) whose annual turnover, at the date of closure of the accounts for the year, exceeds AOA 7 billion.
In addition, in 2020, the Circular Letter of the National Bank of Angola number 002/DCC/2020, with guidelines for banking financial institutions in the validation of payments under contracts for the provision of services to non-resident entities, entered into force, making it mandatory to prove that the prices practiced in the contract meet the arm’s-length principle, through a transfer pricing documentation (in case of Large Taxpayers) or benchmarking studies (applicable to other taxpayers).
Finally, since Angola is not an Organisation for Economic Co-operation and Development (OECD) member state, its transfer pricing rules follow in a complementary way the recommendations of the UN Transfer Pricing Manual.
Interest arising from shareholder loans should be deductible for tax purposes up to the limit that would result from the annual average interest rate established by the Angolan Central Bank.
Controlled foreign companies (CFCs)
There are no CFC rules in Angola.