Value-added tax (VAT)
From 1 October 2019 onwards, VAT entered into force in Angola, and the consumption tax was revoked.
The Angolan VAT system is a modern regime with a standard rate of 14% and a broad tax base.
The following reduced VAT rates are applicable to a specific set of transactions:
- 2% on imports and supplies of goods in the Province of Cabinda. This rate was introduced by the Law No. 22/19, of 20 September 2019 (Special Regime of Cabinda).
- 5% and 7% introduced by the Law no. 32/21, of 30 December 2021, that amends the General State Budget for 2022. These rates are applicable to certain products listed in Table Annex I of the GSB 2022.
- The VAT rate is set at 7% for the provision of hotel and restaurant services. Requirements must be met: registration of real estate and motorised vehicles for the development of the activity; issuance of invoices through electronic means; filing of tax returns of the previous tax years.
Note that the regime has some particularities, such as the captivation regime and refunds through tax credit certificates.
The simplified regime
Until the end of 2020, a transitional regime was in force. However, since 1 January 2022, some changes arising from General State Budget for 2022 have been implemented, in which a new simplified taxation regime was created, according to which:
- The regime applies to taxpayers with a turnover or volume of import operations of AOA 350,000,000 or lower, with reference to the previous 12 months;
- Taxpayers are subject to the payment of 7% of the sales received from non-exempt transactions, including advance payments, with the right to deduct 7% of the total VAT incurred, and request a refund of the credit in their benefit;
- Taxable persons under this regime must self-assess VAT at the rate of 7% on the amount of the service paid when acquiring services from non-resident entities.
- The taxpayers under this regime who practice exempt operations are required, in relation to these operations, to pay Stamp Tax on the sales receipt of 7%.
- Entities liable to the simplified regime who carry out exempt operations are allowed to deduct from the CIT assessed the stamp tax paid.
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 standard regime
All entities with a turnover or goods import operations higher than AOA 350 million are liable to the standard VAT regime. These taxpayers and those that choose to be framed in the standard regime should assess VAT on the supplies of goods and services and, in principle, are able to deduct the VAT incurred on their purchases.
Entities operating in the manufacturing industry are always required to be under the standard VAT regime.
The taxpayers subject to this regime should:
- Assess VAT on invoices issued.
- File a monthly VAT return up to the last working day of the end of the month following the one in which the operations were carried out (file all the respective annexes of the VAT return).
- Have proper accounting according to Angolan PGC (Angolan GAAP).
When carrying out exclusively exempt operations, these taxpayers are required to pay stamp tax on the receipt at a rate of 7%.
The following supplies are VAT exempt:
- Pharmaceutical products intended exclusively for therapeutic and prophylactic purposes.
- 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 for housing and commercial purposes.
- Collective transport of passengers.
- Financial intermediation operations, including financial leasing, except for those where a specific and predetermined fee is charged for the service.
- Provision of life insurance and reinsurance.
- Petroleum products.
- 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.
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 recognized by the General Tax Administration ("Administração Geral Tributária" or "AGT").
Exports and related operations, operations related to vessels and aircraft engaged in commercial activity, and international transport of passengers are classified as zero rated.
The Angolan Tax Authorities can, in any circumstance, decide on the inclusion or exclusion of taxable persons from the obligation to captivate the tax, whenever justified reasons of protection of public revenues exist.
VAT shall be paid until the last working day of the month following that to which the transactions relate.
Additional information related to VAT
It was foreseen that, from May 2021, on the receipts obtained at point-of-sales related to sales of goods and the provision of services carried out by VATable persons, VAT will be withheld at a rate of 2.5%.
Entities under the standard and the simplified VAT regime may deduct the total amount of the VAT withheld on their VAT return.
The Financial Banking Institutions shall ensure the automatic transfer to the Treasury Account of the VAT withheld, being required to comply with the applicable deadlines and declarative obligations.
However, this rule was postponed to a date to be informed.
Customs duties are levied on imports at ad valorem rates varying from 2% to 70%.
Listed equipment may be imported temporarily if a guarantee is provided in favour to the Angola Tax Authorities. In addition, a 2% customs fee is due on the importation.
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 nationalized 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.
All production, imports, and sales by public auction are subject to excise duty, with different rates of 2%, 5%, 19%, 25%, and 30%, depending on the product. The rates applicable to the oil derivatives remain, generally, at 2%.
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:
- For goods produced in the country, the transactional value;
- For petroleum products, the tax is levied on the cost of production.
Producers are required to assess the excise duties when products are made available to buyers/customers and must submit electronically by the last working day of each month.
The Excise Duties Code also provides for some exemptions, including:
- Goods intended for education;
- 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; and,
- 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 General Tax Administration (“AGT”) in an automatic manner of information related to production.
The counting and measurement systems referred to above must be certified by 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 (in cash or in kind). (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 commission 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.|
- The entities covered by the standard VAT regime should be exempt from Stamp Tax on receipts. Also the ones under the simplified VAT regime may be exempt. Nevertheless, taxpayers under the simplified VAT regime who practice exempt operations are required, in relation to those operations, to pay 7% Stamp Tax on receipts.
Property tax ("PT")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.
PT 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 PT 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
PT 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 PT only on AOA 30 million, resulting in PT 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 PT rate levied on the transfer of immovable property is 2%.
The following entities are exempt from PT (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 PT 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 PT until March of the following year. The payment in six instalments is possible if approved by the tax authorities.
For PT 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.
PT 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.
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.