Angola Fiscal Guide 2013/14
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TAX
Angola
Fiscal Guide
2013/14
kpmg.com
1 | Angola Fiscal Guide 2013/2014 Angola Fiscal Guide 2013/2014 | 2
Income tax
Business income
Corporate Income Tax is levied on the taxable income assessed by the companies developing a business
activity in Angola and on revenues earned by individuals if said income is not subject to Personal Income
Tax.
Whenever a non-resident company is present in Angola for more than 90 days during a given period of 12
consecutive months, such company is deemed to have a permanent establishment herein and is subject
to an equivalent tax treatment as if it were a resident company.
Tax rates
Resident companies are taxed on their worldwide income at a rate of 35%. On the other hand, branches
of non-resident companies are taxed only on the revenues derived from activities carried out in Angola at
the same rate of 35%.
Companies whose profit is derived from agricultural or similar activities will be subject to Corporate
Income Tax at a 20% rate. Those companies whose profits are derived from mining enterprises will be
subject to Corporate Income Tax at a 25% rate under the Mining Code.
Resident companies Rate
Corporation income tax 35%
Withholding tax as per Law No. 7/97:
»» Technical services 5.25%*
»» Construction services 3.5%*
Capital gains 10% *** over the positive difference between
sale price and acquisition price (when not subject
to CIT or PIT)
Dividends (earned by resident company):
»» Domestic source 10% */**/***/****
INTRODUCTION »» Foreign source Taxed as business income
Angola
Interest (paid by resident company) »» 15% **/*** − loans (an exemption is applicable
if the income is received by a financial
institution subject to CIT)
»» 10% */**/*** − corporate bonds and
shareholder loans; 5% */**/*** − Government
Fiscal Guide
and Central Bank bonds if maturity is higher or
equal to 3 years (10% otherwise)
* Tax withheld at source.
** Final taxation.
*** Tax on Invested Capital.
2013/2014 **** Please note that an exemption is applicable should the entity receiving the dividends own at least 25% of the
share capital of the company distributing the dividends for a period longer than one year.
* Tax withheld at source.
Resident companies (continued) Rate ** Final taxation.
*** Tax on Invested Capital.
Royalties (earned by resident company):
»» Domestic source 10% */**/*** Resident individuals Rate
»» Foreign source Taxed as business income Personal Income Tax:
Fees (earned by resident company) Taxed as business income »» Salaries and wages 0% − 17% */**
»» Professional services (including artists/ 10.5% */** (15% levied on 70% of total income)
* Tax withheld at source. sportsmen) fees
** Final taxation.
*** Tax on Invested Capital »» Capital gains There is no specific tax on capital gains
Resident companies Rate Dividends (earned by resident individual):
»» Domestic source 10% */**/***
Services subject to Consumption Tax 5% or 10% rate, depending on the service
provided (cost borne by the purchasing entity) »» Foreign source Not subject to tax
Rental income (earned by resident company) 15%*/** (subject to Real Estate Tax at a rate of Interest (earned by resident individual):
25% applicable over 60% of the rent revenues) »» Domestic source ›› 15% **/*** − loans
›› 10% */**/*** − corporate bonds and
Stamp Duty »» 1%
shareholder loans
»» 0.1% to 0.5% – loans between non-financial
›› 5%*/**/*** − Government and Central Bank
companies
bonds if maturity is higher than 3 years (10%
»» 0.2% – loans made by financial companies otherwise)
* Tax withheld at source. »» Foreign source Not subject to tax
** Please note that an exemption is applicable should the entity receiving the dividends own at least 25% of the
Royalties (earned by resident individual):
share capital of the company distributing the dividends for a period longer than one year.
»» Domestic source 10% */**
Non-resident companies Rate »» Foreign source Not subject to tax
Corporate Income Tax 35% (in case of a permanent establishment) Fees (earned by resident individual) 10.5% (PIT) or 5.25% (CIT)*
Withholding tax as per Law No. 7/97: Rental income (earned by resident individual) 15% */** (Subject to Real Estate Tax at a rate of
»» Technical services 5.25% */** 25% applicable over 60% of the rent revenues)
»» Construction work 3.5% */**
* Tax withheld at source.
Capital gains In some cases, 10%*/**/*** over the positive ** Final taxation.
difference between sale price and acquisition *** Tax on Invested Capital.
price (when not subject to CIT or PIT) Reporting obligation
Dividends (paid by an Angolan resident company) 10% */**/*** As a general rule, taxable income is determined through a tax return “Modelo 1” to be submitted annually
up to the end of May of the following year.
Remittance of branch profits Out of scope
If the referred tax return is not submitted, the tax authorities may determine the taxable income based on
Interest (paid by an Angolan resident company) »» 15% */**/*** − loans assumptions.
»» 10% */**/*** − corporate bonds and
Payment
shareholder loans
Corporate Income Tax must be paid by 31 May of the year following the year for which tax is due, upon
»» 5% */**/*** − Government and Central Bank the submission of the tax return “Modelo 1”. Moreover, 75% of the previous year’s final tax chargeable
bonds if maturity is greater than 3 years (10% (based on the previous year’s tax return) must be paid as provisional tax for the current year in three equal
otherwise) instalments in January, February and March of the year following the year for which tax is due, to be
Royalties (paid by an Angolan resident company) 10% */**/*** deducted upon the submission of the referred tax return.
Services subject to Consumption Tax 5% or 10% rate, depending on the service
provided (payment and cost borne by the Angolan
company)
Fees (paid by an Angolan resident company) 5.25% or 3.5% depending on services provided
*/ **
3 | Angola Fiscal Guide 2013/2014Non-resident Individuals
Personal Income Tax:
Rate
Transfer pricing rules
»» Salaries and wages Subject to Personal Income Tax in Angola Presidential Decree no. 147/13, introduced a transfer pricing regime to be followed from 2013 onwards.
provided it derives from services supplied in Despite generally following the OECD Transfer Pricing Guidelines, it has some relevant particularities.
Angola, paid directly or indirectly by an Angolan
According to the new transfer pricing regime, if the terms and conditions of a related party transaction
entity
in which an Angolan taxpayer and its related entity, subject or not to Corporate Income Tax, are not in
»» Professional services 10.5% or 5.25% rate, depending on the service accordance with the ones that would normally be accepted or practiced between independent entities,
supplied the National Directory of Taxes can adjust the taxable income so that the amount corresponds to the one
assessed if no special relations existed.
Capital gains There is no specific tax for capital gains
The new transfer pricing rules are applicable to all in-border and cross-border commercial and financial
Dividends (paid by an Angolan resident company) 10% */**/***
transactions established between the taxpayer and its related entities beginning or occurring on or after
Interest (paid by an Angolan resident) »» 15% */**/*** − loans 1 January 2013. Specific rules apply to the definition of a related entity.
»» 10% */**/*** − corporate bonds and The new regime also establishes the main taxpayer’s obligations, namely the preparation and submission
shareholder loans to the National Directory of Taxes of the transfer pricing documentation for:
»» 5% */**/*** − Government and Central Bank
»» taxpayers with an annual turnover (defined by the sum of sales and provision of services) equal to or
bonds if maturity is greater than 3 years (10%
greater than Akz7 billion (US$70 million);
otherwise)
»» taxpayers included in the Major Taxpayers List; and
Royalties 10% */**/***
»» taxpayers developing their activities in the following sectors: financial, oil&gas, diamond and
* Tax withheld at source. telecommunication.
** Final withholding tax.
*** Tax on Invested Capital. This obligation is foreseen to apply annually, being the transfer pricing documentation submitted by the
end of the sixth month after the fiscal year’s closing date.
Withholding obligation on supplies of services
Law no. 7/97 provides that resident companies acquiring services from resident or non-resident The Angolan transfer pricing legislation foresees that the transfer pricing report should contain the
companies should withhold the tax on the moment of its payment and deliver it to the tax authorities up following structure: (i) executive summary; (ii) macroeconomic overview; (iii) company description; (iv)
to the end of the following month. functional and risk analysis; (v) identification of related-party transactions; and (vi) economic analyses of
related-party transactions.
Withholding tax (WHT) as per Law no. 7/97 applies a general withholding rate of 5.25% on payments for
services acquired, except in the case of construction services where a reduced rate of 3.5% is applicable. In order to assess and demonstrate the market price of those, the National Directory of Taxes only
accepts the traditional transfer pricing methods:
For resident entities, WHT tax corresponds to a Corporate Income Tax payment in advance, which can be
deducted from the final payment. »» the comparable uncontrolled price method;
However, amounts withheld regarding the services contracted from non-resident entities correspond to a »» the resale price method; and
final tax payment in Angola.
»» the cost plus method.
Special regimes
The recent implementation of the transfer pricing rules in Angola brings out a number of challenges for
Special tax regimes apply to companies engaged in petroleum and mining operations. These special tax
multinational and local companies operating in Angola. Moreover, some additional questions regarding
regimes are not covered in this document.
the Angolan transfer pricing regime are still pending and should be promptly clarified. KPMG Angola is
closely working with the National Directory of Taxes in order to address the main challenges arising from
the new transfer pricing regime in order to ensure the taxpayers are compliant with these new rules.
Major Taxpayers Regime
In 2013, the Major Taxpayers Regime was approved, determining the rights and obligations of the entities
considered Major Taxpayers. The definition of such entities relies with the Minister of Finance, which has
published on the 28th of February 2014, and amended on the 24th of March 2014, the list of companies
considered as Major Taxpayers.
The Decree also regulates the Major Taxpayers Tax Office which has its headquarters in Luanda. All
entities foreseen in the Major Taxpayers list are assigned to this Tax Office.
5 | Angola Fiscal Guide 2013/2014Inheritance and
Moreover, the recently published Executive Decree no. 333/13 of 8 of October, determines that entities
providing services subject to Consumption Tax to Oil and Gas companies shall assess the tax on the
invoices issued. However, the responsibility of delivering the tax to the Angolan treasury falls on the Oil
endowments
and Gas Company and not on the entity supplying the services.
A tax on inheritance and endowments is levied on a sliding scale on the value of goods donated or
inherited at rates between 10% and 30%. Real Estate Tax
The Real Estate Tax (RET) code provides that rents paid by entities responsible for having organized
Consumption Tax
accounting records should be subject to withholding tax, at the effective rate of 15%.
Additionally, for the properties not leased, RET is due at the rate of 0.5% over the tax asset value (i.e.
registered value of property for tax purposes) exceeding Akz5 million (About US$50 000).
Consumption Tax shall be levied at a reduced rate of 2% − applicable to domestic supplies and
importation of commodities listed in Appendix I of the Consumption Tax Regulations. Increased rates of
Real Estate Transfer Tax
20% and 30% apply to commodities (essentially luxury goods) listed in Appendix II of the Regulations.
Moreover, the following services are also subject to Consumption Tax:
Service Rate The acquisition of properties located in Angola is subject to Real Estate Transfer Tax, at a 2% rate
Telecommunication services 5% applicable over the acquisition value.
Water consumption 5% However, the acquisition of properties for industrial activities can be exempt from Real Estate Transfer
Tax.
Energy consumption 5%
Please note that the acquisition of at least 50% of the social participations of commercial companies is
Rental of areas specifically used for storage or collective parking of vehicles 5% subject to Real Estate Transfer Tax if the company owns properties in Angola.
Consultancy services, including legal, tax, financial, accounting, IT, engineering, 5%
architecture, economics, real estate and audit
Photography, film processing, image editing, IT and web-design services
Port, airport and dispatch services
5%
5%
Tax on Invested Capital
According to the Tax on Invested Capital Code a rate of 10% is applicable to the distribution of dividends.
Private security services 5%
However, an exemption is applicable if the dividends are distributed by an Angolan company to another
Management of canteens, cafeterias , dormitories, real estate and condominiums 5% Angolan company which holds more than 25% of the share capital of the company for a period longer
than 1 year.
Access to shows or cultural, artistic and sporting events 5%
Payment of royalties and sale of shares are subject to taxation at the rate of 10% (withholding tax and
Road, maritime, rail and air transportation services of goods (including storage 5%
self-assessment, respectively).
services related to the transportation) and passengers, as long as the service is
provided exclusively in Angolan territory Additionally, the income derived from interest received is subject to Tax on Invested Capital at the rate of
Hotel and similar services 10% 5%, 10% or 15%.
Rental of machinery and other equipment, as well as work done on tangible 10%
Stamp Duty
movable property
Rental of areas for the organization of conferences, colloquia, exhibits, publicity 10%
and other events
Stamp Duty is levied on the acts, deeds, documents, papers receipts and other transactions included
Tourism and travelling services promoted by travelling agencies or similar 10% in the Stamp Duty table. Among others, Stamp Duty is due at the rate of 1% over receivables. Credit
companies operations between non-financial entities are also subject to stamp duty at rates varying from 0.1% and
0.5% (depending on the loan duration) which is levied over the loan amount. Additionally, interest paid
Should an Angolan company provide a service subject to Consumption Tax, the tax should be included in
over loans made by financial companies is subject to stamp duty at the rate of 0.2%.
the invoices issued to the purchaser of the service, which will bear the cost of the tax. The Consumption
Tax assessed shall be delivered to the Angolan treasury by the service provider. However, for services
subject to Consumption Tax provided by a non-resident entity, the Angolan company subject to Corporate
Income Tax shall self-assess Consumption Tax over the acquisition price and deliver it to the Angolan tax
authorities.
7 | Angola Fiscal Guide 2013/2014New invoicing regime Double tax treaties and
Presidential Decree no. 149/13, of 1 October, establishes a new regime governing Invoices and
Equivalent Documents. This regime aims to regulate the new obligations regarding the issue,
conservation and archive of invoices and equivalent documents for taxpayers in the course of their
reduced rates
commercial and industrial activity. Angola has not entered into any double taxation treaties with other countries.
Among other requirements, it is now mandatory to issue invoices written in Portuguese and in the local
currency (Kwanza). Such invoices must be issued when the payment occurs or until five days after the
payment.
Tax reform
Personal Income Tax
Angola is undergoing a tax reform under which several tax laws have been published in 2012 (Stamp
Duty Code, Tax on Invested Capital Code and Consumption Tax Regulation) and in 2013 (Major Taxpayers
Statute and Invoicing Regime).
Individuals (regardless of their residency) whose income results from services rendered under a labour The remaining laws, which shall change the Corporate Income Tax Code, Personal Income Tax Code,
contract with an Angolan entity, paid directly or indirectly by an Angolan entity in such territory, are General Taxation Law and the Tax Procedure Code, have already been approved by the National
subject to Personal Income Tax therein. Personal Income Tax will only be levied over Angolan sourced Assembly and are expected to be published in the near future.
income and not over the individual’s worldwide income.
Income obtained by self-employed individuals is also subject to taxation in Angola whenever it is paid by
an Angolan entity.
Furthermore, individuals are not required to submit a annual tax return.
Investment information
Rates Investment rules
Employees are subject to Personal Income Tax – on a monthly basis – at the following marginal rates: Investments to be carried out under the terms of the Private Investment Law may enjoy certain
incentives and tax benefits and will entitle its investors to repatriate funds outside of Angola.
Salaries in Kwanzas* Rates In order to apply for the Private Investment Law, a minimum investment of US$1 million per investor
Up to 25 000 Exempt is required and the investment is always subject to the approval of the National Agency for Private
Investment (“ANIP”).
25 001 − 30 000 5% of the amount exceeding 25 000
Under the aforementioned regime, once the private foreign investment project is implemented and proof
30 001 − 35 000 Akz250 + 6% of the amount exceeding 30 000 of its execution is given and in accordance with the conditions set out in the authorisation granted by
BNA, the investor may transfer:
35 001 − 40 000 Akz550 + 7% of the amount exceeding 35 000
»» Dividends and distributed profits, once proof of payment of taxes due is properly verified and certified,
40 001 − 45 000 Akz900 + 8% of the amount exceeding 40 000
bearing in mind the amount of the invested capital and how it matches the respective participation
45 001 − 50 000 Akz1 300 + 9% of the amount exceeding 45 000 from the capital held by the company;
50 001 − 70 000 Akz1 750 + 10% of the amount exceeding 50 000 »» Capital gains and any income derived from acts and contracts which, according to the present law, are
qualified as private investment;
70 001 − 90 000 Akz3 750 + 11% of the amount exceeding 70 000
»» Any compensations for expropriations; and
90 001 − 110 000 Akz5 950 + 12% of the amount exceeding 90 000
»» Royalties or other remuneration arising from indirect investments, related with technology transfers.
110 001 − 140 000 Akz8 350 + 13% of the amount exceeding 110 000
Dividend repatriation should be proportional and graduated, depending on the amount invested, the tax
140 001 − 170 000 Akz12 250 + 14% of the amount exceeding 140 000
and customs benefits, the investment time frame, the actual profit obtained and on the socioeconomic
170 001 − 200 000 Akz16 450 + 15% of the amount exceeding 170 000 impact of the investment, namely the impact in the reduction of regional asymmetries and the impact in
the Angolan balance of payments.
200 001 − 230 000 Akz20 950 + 16% of the amount exceeding 200 000
Above 230 000 Akz25 750 + 17% of the amount exceeding 230 000
* US$1 approximately Akz97.36
Moreover, income obtained by self-employed individuals is subject to a rate of 15%, which is levied over
70% of the taxable income, resulting in an effective tax rate of 10.5%.
9 | Angola Fiscal Guide 2013/2014Regulation on contracting
There are minimum periods (counting from the effective implementation of the investment) the investor
must comply with in order to repatriate profits and dividends, which depend on the amount invested and
on the location where the investment is to be carried out.
Investments in the mining, banking and oil industries are governed by special regimes and require prior
approval from the Ministry of Geology and Mining, Angolan Central Bank, and the Ministry of Petroleum
and Sonangol respectively.
foreign technical assistance
Tax incentives
In addition to capital allowances on fixed asset expenditure, special tax allowances are available for
or management services
investment in listed development areas, priority sectors and other relevant investments. Incentives According to Presidential Decree no. 123/13, of 28 August 2013, Angolan companies which hire technical
include tax exemptions, reduced rates of taxation and exemption on import duties as well as full and management assistance services from foreign companies are required to follow certain regulations.
deduction on infrastructural expenditure.
Every technical assistance or management contract signed between an Angolan entity and a foreign
entity with a global amount no greater than Akz100 million* (about US$1million) and a duration no longer
Exchange controls
than 12 months must be reported to the Ministry of Economy, meaning that once the contract is signed
its terms and conditions have to be reported to such Ministry for control purposes.
On the other hand, in case the contract exceeds the abovementioned limit, it is subject to the approval
Exchange controls (managed by the Central Bank of Angola) require that all transfers of direct of the Ministry of Economy, which takes into account several requirements, including the need of hiring
investments and inward and outward payments be subjected to an approval process by the Central Bank foreign entities (instead of local companies) and the advantages that such hiring brings to the beneficiary
of Angola (“BNA”). Resident foreign individuals may operate foreign exchange bank accounts in banks company and the Angolan economy.
abroad. Except for enterprises carrying on mining operations, Angolan-based foreign subsidiaries and * These limits are increased to Akz300 million (about US$3 million) for the companies providing services to the Oil
representative offices may open foreign exchange bank accounts in Angolan-based banks. Non-residents & Gas companies.
are able to open and operate accounts in domestic or foreign currency in Angolan-based banks.
Remittances abroad may only be affected through the local banking system and require prior approval
from the BNA. The repatriation approval provides that an authorised investor may transfer out of Angola
in an approved foreign currency its profit distributions, expropriation-related compensation received and
Residence and work
the proceeds from foreign capital disinvestment, including capital gains.
Companies engaged in mining operations, including the diamond sector, are subject to tight foreign
exchange restrictions. The most important of these restrictions are:
permits
All foreign workers engaged in employment duties in Angola must obtain visas in order to justify their
»» Payments of import/export operations must all be made through an authorised local bank; stay. If the foreign workers are hired by an Angolan company or a foreign company with a permanent
establishment in Angola, foreign workers are also required to obtain a work permit.
»» All export-related proceeds must be deposited in a local bank account;
»» A mining company may not hold a bank account outside Angola; and
»» Guarantees or escrow-type accounts with foreign financial institutions may only be held for the
purpose of debt servicing relating to loans previously approved by the BNA. Annual budget
The new Regime of Foreign Exchange Law for the Oil and Gas sector, published on 13th of January
2012, establishes guidelines which are to be followed by all Oil and Gas companies operating in Angola,
with regards to bank accounts, including the payment of taxes, goods and services. The main change
announcement
introduced by this law is that the payments received/made by the Angolan companies have to be made The Minister of Finance generally announces the annual Budget and Taxation Proposals in November of
through a local bank. each year for the following fiscal year, which starts on 1 of January.
Finally, please note that a significant change in the Angolan Foreign Exchange regime was recently
published by the BNA, namely increasing the general limit for transfers to abroad of invisible current
transactions* that are exempt from prior licensing by the BNA from US$300 000 to Akz100 million**
(about US$1 million).
* Invisible current transaction include, services, transportation, insurance, travel, trade commissions, patents and
trademark rights, royalties or salaries.
** These limits are increased to Akz300 million (about US$3 million) for the companies providing services to the Oil
& Gas companies.
11 | Angola Fiscal Guide 2013/2014Trade and bilateral Official holidays
agreements »» 1 January (New Year’s Day)
»» 25 January (Colonial Repression Martyrs’ Day)
Angola is member of the following international organizations: »» 4 February Liberation Day (Day of the Armed Struggle)
»» WTO, Economic Community of Central African States (CEEAC); »» 8 March (International Women’s Day)
»» Community of Portuguese-speaking countries (CPLP); »» 3 or 4 April (Peace and National Reconciliation Day)
»» SADC; »» 18 April (Good Friday)
»» ACP-EU Partnership Agreement; »» 1 May (Labour Day)
»» COMESA; and »» 17 September (National Founders’ and Heroes’ Day)
»» OPEC. »» 2 November (All Saint’s Day)
»» 11 November (Independence Day)
Economic statistics
»» 25 December (Christmas Day)
Prime Interest Rate (January 2014) 9.25%
US$ Exchange Rate (February 2014) Akz97.3650
Inflation (December 2013) 7.69%
GDP (2013) 7.4%
Travel Information
Visa requirements Invitation letter needed Visa takes up to 15 days
Flights Daily flights to and from Lisbon, Madrid,
Amsterdam, Johannesburg and Dubai
Inoculations Yellow fever certificate requested
Currency
The Kwanza (Akz) is the official currency of Angola.
Languages
Portuguese is the official language, while other local languages most commonly spoken are Kimbumdo,
Umbumdo and Kikongo.
13 | Angola Fiscal Guide 2013/2014Contact us Luís Magalhães Head of Tax T: +351 210 110 087 E: imagalhaes@kpmg.com Gustavo Amaral Director, Tax T: + 244 227 280 101 E: gamaral@kpmg.com kpmg.com Notice: Whilst reasonable steps have been taken to ensure the accuracy and integrity of information contained in this document, we accept no liability or responsibility whatsoever if any information is, for whatever reason, incorrect. We further accept no responsibility for any loss or damage that may arise from reliance on information contained in this document. This document is based on our interpretation of the current income tax law and international tax principles. These principles are subject to change occasioned by future legislative amendments and court decisions. You are therefore cautioned to keep abreast of such developments and are most welcome to consult us for this purpose. © © 2014 KPMG Angola – Audit, Tax, Advisory, S.A., an Angolan company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Printed in Angola The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International Cooperative (“KPMG International”). MC9197
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