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From 1 October 2019 onwards, VAT entered into force in Angola, and the consumption tax was revoked.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 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 (Special Regime of Cabinda; and,
- 5%: introduced by the Law No. 31/20 of 11 August 2020, that amends the General State Budget for 2020. This rate is applicable to:
- Imports and supplies of goods of “basic basket”, as listed in the Annex I table of the VAT Code;
- Import of agricultural inputs as listed in Annex I of Law No. 31/20 of 11 August 2020, that amends the General State Budget for 2020;
- The reimportation of goods by those who exported them, in the same state in which they were exported, when they benefit from exemption from customs duties; and
- Exploitation and practice of games of chance and social entertainment, as well as the respective commissions and all related transactions, when they are subject to the Special Gambling Tax.
Note that the regime has some particularities, such as the captivation regime and refunds through tax credit certificates.
Until the end of 2020, a transitional regime will be in force, during which:
- only companies registered in the Large Taxpayers’ Tax Office are subject to the general VAT regime;
- companies not included in the list of large taxpayers but with a turnover or imports of goods higher than an amount of circa 250,000 United States dollars (USD) will be subject to a simplified taxation regime (the exact amount is the equivalent amount in Kwanzas that is established in article 5 (2) of Law 30/11, of 13 September, on Micro, Small and Medium Companies); and
- the remaining companies will not be considered taxpayers for VAT purposes (non-taxation regime).
The simplified regime
Companies under the simplified regime are considered taxpayers for VAT purposes.
Taxpayers under this simplified regime:
- do not charge VAT to their customers (invoices issued by these taxpayers shall not include VAT)
- self-assess VAT at a 3% rate when acquiring services from foreign suppliers
- pay VAT at a 14% rate on imports of goods
- can recover 4% of input VAT, and
- shall pay an amount of tax corresponding to 3% of the revenue/sales effectively received from clients (based on receivables), less the input VAT deductible, on a quarterly basis.
Taxpayers under the simplified regime may opt to be included in the general VAT regime if all the following requirements are fulfilled:
- Annual turnover/imports of USD 250,000 (the equivalent in Kwanzas).
- 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.
As of 1 January 2021, the simplified regime (second point above) ceases and the taxpayers will be in principle subject to the standard VAT regime. However, the proposal for the Angolan 2021 State General Budget – which is yet to be published and so the final version is still unknown – foresees the creation of a new simplified regime, according to which:
- It is applicable to taxpayers whose turnover and goods import operations is equal to or less than AOA 350,000,000;
- The taxpayers are subject to the payment of 7% of the sales received from non-exempt transactions, including advances or advance payments, with the right to deduct 7% of the total VAT incurred;
- Taxable persons under this regime, when acquiring services from non-resident entity, self-assess VAT at the rate of 7% on the value of the service actually paid;
- Taxpayers under this regime may request a reimbursement of the credit in their favour, under the terms of the VAT regulation with the appropriate adaptations;
- The taxpayers under this regime, who practice exempt operations are obliged, in relation to these operations, to pay Stamp Duty on the sales receipt of 7%, referring to the amount 23.3 of the table attached to the Stamp Tax Code; and,
- Are excluded from the scope of application of VAT the taxpayers whose turnover or goods import operations are equal to or less than AOA 10,000,000.00 (Ten million kwanzas).
The standard regime
Large taxpayers and taxpayers who choose to be included in the standard regime will assess VAT on the supplies of goods and services and, in principle, will be able to deduct the VAT incurred on their purchases. From 2021, all taxpayers that have a turnover above USD 250,000 (the equivalent in Kwanzas) or the yet to be known thresholds, must be on the VAT regime.
The taxpayers subject to this regime should:
- Assess VAT on invoices issued.
- File a monthly VAT return up to 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.
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 purpose.
- 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.
Exports and related operations, operations related to vessels and aircraft engaged in commercial activity and international transport of passengers are classified as zero rated.
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.
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.
Producers are required to assess the excise duties when goods are made available to purchasers/clients and should be submitted in duplicate and electronically, until the last day of each month.
The Excise Duties Code also provides for some exemptions, including:
- Exports by the producer itself.
- Goods imported by international organisations.
- Raw materials for domestic industry.
- Goods intended for laboratory and scientific research purposes.
- Personal goods defined by customs legislation.
- Consumer goods as shipboard supplies.
- Products sold on board.
- Products benefiting from the suspension of customs duties.
- Products sold in duty-free stores.
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, as well as those covered by the transitional regime, are exempt from 1% stamp tax on the receipts (in cash or in kind).
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%|
|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 or the ones under the simplified VAT regime should be exempt from stamp tax on receipts.
Property Tax (PT)
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)||PT rate (%)||Fixed value|
|Up to 5 million||0.1|
|From 5 000 001 to 6million||5 000.00|
|Over 6 million (on the excess of 5million) (1)||0.5|
- For example, an asset registered at AOA 35 million will pay PT only on AOA 30 million, resulting in an 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 property tax 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.
The Special Contribution is levied on payments due to non-residents related to Technical Assistance and Management Contracts.
This regime introduces restrictions on the payment for technical assistance and management services to foreign entities, particularly by imposing a special contribution of 10% on the amount of the transfer due by the entity requesting the transfer of funds abroad.
This regime applies to both private and public companies. Petroleum activities are not liable to the special contribution.