Angola

Corporate - Tax credits and incentives

Last reviewed - 19 July 2022

Tax Benefits Code

The main benefits foreseen under the recently approved Tax Benefits Code (TBC) encompass the following:

Profits or dividends from securities traded in regulated market

  • Reduction by 50%, for 5 years, of the IIT rate applicable to profits/dividends from shareholdings negotiated in regulated market;
  • Exemption from IIT on profits/dividends distributed by entities with head office or place of effective management in Angola, whose capital is negotiated in a regulated market, to corporations with head office or effective management in Angola and subject to CIT, provided that a participation of at least 25% was held for more than one year.

Job creation, Internships and Professional Training

Job creation

  • Taxpayers that create jobs are allowed a CIT or a PIT deduction corresponding to 3 to 7 times the lowest wage paid to civil servants per job created. Additional requirements should be met. These benefits may duplicate in case of creation of jobs for women.
  • For purposes of the above, jobs are created in case of a positive balance of the existing jobs at the beginning and at the end of the economic year.

Internships and professional training

  • Taxpayers that hire young people for internships or for scientific investigation are allowed a deduction of the hiring costs for CIT purposes, up to certain limits and according to specific rules.
  • In case of certified training provided in Angola, related costs allow an additional deduction of 25% capped at AOA 1 million.

Environment

  • Establishment of tax benefits related with electrical vehicles for the purpose of Customs Duties and Tax on Motorised Vehicles;
  • Tax benefits are granted in connection with the production and distribution of renewable energies for the purposes of PT, II and IIT.

Financial System and Capital Markets

Tax benefits are granted to:

  • Pension Funds
  • Savings Funds
  • Collective Investment Undertakings (“CIU”)

 

And to income from:

  • Pension Funds;
  • Savings Funds;
  • Capitalization life insurance;
  • Deposits made by individuals; and
  • Deposits made by non resident entities.

 

Private Investment

The tax benefits available for the purposes of CIT, IIT, PT and Stamp Tax granted under the Private Investment Regime are established as applicable to (i) the prior declaration regime, (ii) the special regime and (iii) the contractual regime. The areas covered are also detailed.

Free Zones

Several benefits are granted to companies operating in the Free Zones of Angola, for the purposes of CIT, IIT, PT and Custom Duties.

Capitalization of Companies

Companies are allowed to deduct to the taxable income an amount corresponding to a conventional remuneration of the share capital. Prior approval is required and caps apply.

Restructuring of Companies

Under restructuring operations, companies in Angola can request an exemption or reduction from IP on the transfer of real estate that is not for residential use.

Other tax benefits are foreseen for

  • Micro, small and medium sized companies;
  • Patronage;
  • Public utility associations;
  • Cooperatives;
  • Political parties;
  • Public-Private Partnerships;
  • People with disabilities;
  • Former soldiers and veterans.

We highlight also that:

  • Tax benefits can be passed on as a result of mergers, demergers or other transformation operations, provided that the company resulting from the merger or demerger maintains the statutory object underlying the granting of the tax benefit.
  • Revocations foreseen in this diploma shall not affect the tax benefits granted to Special Tax Regimes (“Regimes Especiais de Tributação”) or the tax benefits granted prior to the entry into force of the law.

Foreign tax credit

Foreign tax credits are generally not available to offset against domestic tax.

Foreign tax credits may be granted according to the provisions of double tax treaties (DTTs).

Private Investment Law

The implementation of investment projects in Angola may benefit from tax incentives regarding CIT, PT, IIT, and Stamp Tax.

The Private Investment Law establishes that the tax incentives may be granted according to the following three regimes: (i) prior declaration, (ii) special regime or (iii) contractual regime.

The benefits granted under the prior declaration includes, for example, a reduction of CIT rate by 20% for a period of two years and the reduction of the IIT rate applicable to dividends by 25% over a two-year period. These are automatically applicable to investments that are not covered by the special regime neither subject to contractual regime .

The special regime applies automatically to private investments entailing the performance of the activities specifically listed in the Regulation of the Private Investment Law, which are all in the priority sectors (education, agriculture, health, tourism, telecommunications, energy, amongst others), in which case the tax benefits vary according to the zone where the investment is made (Zone A, B, C, and D). 

In addition to the above listed benefits, entities may also benefit from other facilities, such as applications for permits, work visas, energy, water supplies, and others. 

Reinvestment of reserves

Profits retained and then reinvested in new installations or equipment during the following three financial years may be deductible from taxable income during the following five years after the investment is finalised, at up to 80% of the value reinvested depending on the location of the investment performed.