Value-added tax (VAT)
The standard VAT rate is 14%, and VAT has a broad tax base.
The following reduced VAT rates are applicable to a specific set of transactions:
- 5% and 7% applicable to the products listed in Table Annex I of the General State Budget (GSB) 2023 (mainly foodstuff).
- 7% on the provision of hotel and restaurant services, provided the real estate and motorised vehicles used within these activities are registered in the name of the company, the taxpayer issues invoices through electronic means, and all tax returns are duly submitted.
- 2% on imports and supplies of goods in the Province of Cabinda and 1% on imports and supplies of foodstuff in the Province of Cabinda, according to the Special Tax Regime for the Province of Cabinda approved by Presidential Decree n.º 4/22, of 23 July 2022.
The standard regime
Local entities with an annual turnover or an annual volume of import operations higher than AOA 350 million are liable to the standard VAT regime.
Entities operating in the manufacturing industry are required to be under the standard VAT regime if in the previous year they had turnover or import operations exceeding AOA 10 million.
Under this regime, taxpayers:
- Issue invoices, charging VAT in respect of their taxable transactions.
- File a monthly VAT return and pay the balance between output and input VAT; VAT returns are filed up to the last working day of the month following the one in which the operations were carried out.
- Have proper accounting records according to Angolan PGC (Angolan GAAP).
The simplified regime
The simplified regime applies to taxpayers with an annual turnover or volume of import operations between AOA 10 million and AOA 350 million.
Under this regime, taxpayers:
- Issue invoices, without VAT.
- File a monthly VAT return and pay an amount corresponding to 7% of the amount received in respect of transactions/advance payments that would be liable to VAT if the taxpayer was on the standard VAT regime, plus 7% of VAT self-assessed in relation to services acquired from non-resident entities, less 7% of input VAT.
Taxpayers under the simplified regime may opt to be included in the standard VAT regime if all the following requirements are fulfilled:
- Organised accounting according to Angolan PGC (Angolan GAAP).
- Absence of tax and customs debt.
- Registration duly updated in the system of the General Register of Taxpayers.
- Issuance of invoices/equivalent documents through certified billing software.
- Submission by electronic transmission of data regarding the VAT returns, as well as the elements of its accounts.
When changing from the simplified to the standard VAT regime, the entity is allowed to deduct the VAT incurred in goods to be sold that have been acquired in the 12 months preceding the change and upon authorisation from the Angola tax authorities.
The following supplies are VAT exempt:
- Pharmaceutical products intended exclusively for therapeutic and prophylactic purposes.
- Provision of educational services by duly recognised establishments.
- Provision of health medical services performed by hospitals, clinics, and the like.
- Transport of sick or injured persons by appropriate authorised bodies in ambulances or vehicles.
- Medical equipment for the exercise of the activity of health establishments.
- Wheelchairs and similar vehicles, typewriters and printers for braille characters, and articles to be used by the blind.
- Books, including in digital form.
- Sale and lease of immovable property.
- Collective transport of passengers.
- Financial intermediation operations, including financial leasing, except for those where a specific and predetermined fee is charged for the service.
- Life insurance and reinsurance.
- Petroleum products.
Imported goods intended as gifts for philanthropic purposes or to mitigate the effects of natural disasters, namely droughts, floods, storms, cyclones, earthquakes, pandemics, and others of an identical nature are exempt from VAT, provided that the respective purpose is duly recognised by the General Tax Administration (Administração Geral Tributária or AGT).
Exports of goods, supplies of goods and service to meet the direct needs of vessels and aircraft engaged in commercial activity, and international transport of passengers are zero rated.
The state (not including public companies) and oil investing companies are required to captivate the 100% VAT charged by their suppliers and pay it directly to the tax authorities. The Angolan National Bank, commercial banks, insurers and reinsurers, and telecommunication operators captivate 50% of the VAT.
Supplies of goods made by supermarkets, supplies of hotel and restaurant services, services provided by commercial banks, supply of water and energy, and services where payment is made through ATM are not subject to the captivation regime.
Customs duties are levied on imports at ad valorem rates varying from 2% to 70%.
The export of goods that are not produced in Angola is subject to customs duties at the rate of 20% plus customs fees (at rate of 0.5%) computed on the customs value, with the exception of goods covered by the Customs Regime Applicable to the Petroleum and Mining Sectors.
The export of nationalised food, medicine, medical equipment, and biosafety goods are subject to customs duties at the rate of 70%, calculated on the customs value.
A special exemption regime applies for the oil industry.
From 1 October 2019 onwards, excise duty entered into force in Angola. However, the Excise Duties Code was updated in July 2021 by the Law 16/21, of 19 July 2021, in force until now.
All production, imports, and sales by public auction are subject to excise duty, with different rates of 2%,3%, 4%, 5%, 8%, 15%, 19%, 20%, 25%, and 50%, depending on the product.
The Excise Duty Code covers operations with the following products:
- Sugar and alcoholic beverages.
- Tobacco and its derivatives.
- Jewellery and goldsmith articles.
- Aircraft and pleasure craft.
- Art objects, collages, and antiques.
- Petroleum products.
- Plastic bags and straws.
- Tires, as specified in the table of Annex I of the Excise Duties Code.
The taxable amount subject to excise duty is as follows:
- For goods produced in the country: The transactional value.
- For imported goods: The customs value.
- For petroleum products: The cost of production.
Producers are required to assess the excise duties when products are made available to buyers/customers and must submit them electronically by the last working day of each month.
The Excise Duties Code also provides for some exemptions, including:
- Goods intended for education or health.
- Goods intended for consumption as provisions for any means of collective transport of passengers with international traffic.
- Products sold on board of collective transport of passengers for international traffic.
- Electric vehicles.
The tax stamp is mandatory, according to the model approved by a specific Diploma, to manufactured beverages, tobacco, and its substitutes, referred to in Annex I of this Law.
The establishments that produce beverages, tobacco, and its manufactured substitutes and petroleum products, referred to in Annexes I and II of this Law, must be equipped with a counting and measuring system for electronic transmission of data to the AGT in an automatic manner of information related to production.
The counting and measurement systems referred to above must be certified by the AGT, under the terms to be regulated.
With the implementation of the VAT and Excise Duties Codes, financing operations, leasing, report, insurance, and reinsurance transactions that are subject and not exempted from VAT are exempt from stamp tax. In addition, the VAT Code revoked stamp tax on customs.
Additionally, with the entrance into force of the VAT, the taxable persons covered by the general regime of the VAT are exempt from 1% stamp tax on receipts.
Stamp tax is payable on a wide variety of transactions and documents, at specific amounts or at a percentage based on value.
If not liable to VAT, the following transactions/documents may be subject to stamp tax:
|Type of operations||Stamp tax rates|
|Stamp tax on receipts. (1)||1% / 7%|
|Stamp tax is applicable to the use of credit in general at rates depending on the period.||Period less than or equal to one year: 0.5%|
|Period greater than one year: 0.4%|
|Period greater than or equal to five years: 0.3%|
|Period not determined (e.g. current account), per month by the monthly average of the debt: 0.1%|
|Real estate operations:|
|Stamp tax is due on the acquisition for consideration of property.||0.3%|
|Stamp tax is also due on letting and sub-letting, as well as on financial leasing of real estate, except when the leasing is for a permanent dwelling, which is exempt from stamp tax.||Commercial purposes: 0.4%|
|Residential purposes: 0.1%|
|Stamp tax is due on the initial or increase of share capital, whether made in cash or in kind.||0.1%|
Insurance provided by national companies is subject to stamp tax. The tax is settled by the insurance company, and the cost is recharged to the insured person. The commissions generated in the insurance mediation business are also subject to stamp tax.
Premiums and commissions related to life insurance products, insurance against accidents at work, health insurance, and agricultural processing and livestock insurance are exempt from stamp tax.
|The stamp tax applies on the amount of premium paid, and rates may vary from 0.1% to 0.3%, depending on the policy’s nature.|
|Commissions for mediation are subject to stamp tax at a rate of 0.4%.|
|In addition to the operations referred to above, stamp tax is also applicable to written agreements, checks, lending, civil deposits, gambling, licences, traders’ books, deeds, report, credit bonds, and transfer of business, among other acts.||Rates vary depending on the nature of the transaction.|
|Taxpayers under the simplified or the standard VAT regime, when carrying out VAT exempt transactions, are liable to pay stamp tax at a 7% rate on the receipts.||7% or 1% in case of international passenger air transport services and the real estate leasing.|
- Until 31 December 2022, this stamp tax was due only by taxpayers that had 'exclusively VAT-exempt transactions'. This new rule is controversial and awaits clarification from the Angolan authorities.
Property tax is levied on the taxable property value of urban and rural property owned, rental income derived from such real estate, and income derived from the sale or transfer of immovable property.
Property tax is levied on rental income at a 25% nominal rate. However, the tax basis is only 60% of the rental income, as it is presumed that 40% relates to costs. Consequently, the effective property tax rate for rental income is 15%.
The taxation of income from rented properties may not be lower than that which would result from taxing the ownership of the same immovable property if it was not generating rental income.
Assets that are not leased
Property tax is levied as follows for the ownership of assets that are not leased:
|Patrimonial value (AOA)||Property tax|
|Up to 5 million||0.1%|
|From 5,000,001 to 6 million||AOA 5,000 (fixed value)|
|Over 6 million (on the excess of 5 million) (1)||0.5%|
- For example, an asset registered at AOA 35 million will pay property tax only on AOA 30 million, resulting in property tax payable of AOA 150,000.
Buildings and land for construction that are not effectively being used are subject to aggravated taxation, subject to certain conditions.
Transfer of properties
The property tax rate levied on the transfer of immovable property is 2%.
The following entities are exempt from property tax (among others):
- State and local municipalities.
- Foreign states, when the properties are allocated to the diplomatic representation or consular, provided there is reciprocity.
- Legalised religious institutions, when the property is allocated to religious matters.
Rents paid by Angolan companies or individuals that carry out a commercial activity are subject to withholding tax (WHT) of 15%. The property tax withheld must be paid to the tax authorities by the end of the following month.
For property not leased, the respective owners must pay the property tax until March of the following year. The payment in six instalments is possible if approved by the tax authorities.
For property tax on the transfer of immovable property, the acquiring party must pay the tax to the tax authorities until the last working day of the month following the transaction/transfer.
Property Tax Model 1 must be filed by the taxpayers each January, disclosing the rents effectively collected in the previous year and the leasing agreements duly stamped.
Employment income tax (PIT)
Resident and non-resident individuals earning income from services directly or indirectly provided to individuals or corporate entities in Angola are subject to monthly taxation (PIT) at rates progressing from 0% to 25%. Angola operates a fairly straightforward pay-as-you-earn (PAYE) system, in which the Angolan employer withholds monthly from each employee's gross compensation the Angolan income tax.
Individuals only deriving employment income are not required to file tax returns, as the employment income tax is withheld at source by their employer.
The GSB for the year 2023 amended the PIT Code and established that the taxable income of Group C taxpayers whose turnover, in the financial year 2022, is equal to or less than AOA 10 million, corresponding to the volume of sales of goods and services not subject to WHT, on which the rate of 6.5% will apply.
Regardless of the volume of invoicing, taxpayers in this group who have organised accounting must follow the rules applicable to the calculation of the taxable income of taxpayers under the CIT regime, with the relevant adjustments.
Social security contributions
Social security contributions are due on the gross income of employees at rates of 3% for the employee (8% in case of retired employees) and 8% for the employer.
The contributions are intended to cover family, pension, and unemployment protection.