13 May 2022
Angola has published Law no. 8/22 of 14 April 2022, the Law Approving the Tax Benefits Code (TBC). The TBC enters into force on 14 May 2022, providing general rules on the application of and eligibility for tax benefits in Angola. The TBC also provides for the consolidation of various tax benefits and some new benefits, as well as the repeal of any contradictory benefits under the following laws and decrees:
Any tax benefits granted under the above before the entry into force of the TBC shall remain in force until the end of the period for which they were granted. Further, it is provided that the TBC does not apply to tax benefits granted under the special taxation regimes for oil and mining activities, which continue to be regulated by their respective laws.
The main tax benefits provided under the TBC are summarized below. For the purpose of certain benefits, 4 investments zones are established:
Listed Shares on The Angolan Market
A 50% reduction in the Investment Income Tax is provided on profits attributed to shareholders of commercial or civil companies under a commercial form, and the repatriation of profits attributable to permanent establishments of non-residents in Angola from shares that are traded on an Angolan regulated market. This applies for a period of 5 years from the date the shares were admitted for trading on a regulated market.
Further, an Investment Income Tax exemption is provided for any profits or dividends distributed by a company whose capital is traded on a regulated market to another legal person (beneficiary) liable to Corporate Income Tax (even if exempted), provided the company and the other legal person have their registered office or center of effective management in Angola. The exemption is subject to the condition that the beneficiary holds at least 25% of the capital of the distributing company for at least one year prior to the distribution.
Tax Deduction for Job Creation
Taxpayers are allowed a deduction per job created as follows, calculated on a monthly basis:
The deduction is taken in the calculation of the taxable income for the year to which they refer, or for the year in which the employee completes one year of service. If less than one year, the deduction is taken proportionally based on the period of employment, as long as it is at least 6 months. Further, the deduction is doubled when the employee is a woman.
Professional Internships and Training
Taxpayers are allowed a deduction equal to 50% of the lowest civil service salary hiring young people for professional internships or for scientific research and investigation for a period of at least 6 months, and up to 1 year. The deduction is increased to 60% where the people hired are women or persons with disabilities. Taxpayers are also allowed to increase deductible training costs for employees by 25%, subject to a cap of AOA 1 million.
Environmental Tax Benefits
Several environmental tax benefits are provided, including:
Tax Benefits for Pension Funds
Pension funds that are established and operated in accordance with Angolan law are granted the following benefits:
Benefits are also provided for participants in pension funds, including:
Tax Benefits for Undertakings for Collective Investment
Undertakings for Collective Investment are granted the following benefits:
Income received or made available to participants in Undertakings for Collective Investment from redemptions and profit distributions, as well as capital gains from the disposal of units, is exempt from Investment Income Tax.
Tax Benefits for Private Investment
Tax benefits are provided for private investments made under the terms and regulations of the Private Investment Law. The tax benefits depend on the investment scheme applied:
It is also provided that the above benefits may be adapted in the case of public-private partnerships where the State has a majority shareholding.
Tax Benefits for Free Trade Zones
Companies carrying out investment operations in Angola's Free Trade Zones can benefit from the following:
Tax Benefits for the Capitalization of Companies
In determining the taxable income of companies with a registered office or effective center of management in Angola, an amount corresponding to the agreed remuneration of the share capital may be deducted. The deduction amount is calculated by applying a rate of 5% to the amount of contributions made up to AOA 8 million, by cash payments, or through the conversion of capital contributions or loans from shareholders, as part of the share capital increase. This is subject to certain conditions, including that:
Tax Benefits for Corporate Restructuring
Companies that are reorganized as a result of restructuring operations or cooperation agreements may be granted an exemption from or a reduction in the Property Tax rate on the transfer of real estate that is necessary for the restructuring operations or cooperation agreements. This is not available in respect of real estate intended for residential purposes.
Tax Benefits for Micro, Small, and Medium Enterprises
Micro enterprises are allowed to pay tax at a rate of 2% on gross sales, on a monthly basis, with payment due by the 15th day of the following month. Small and Medium Enterprises are provided a Corporate Income Tax rate reduction, depending on the zone:
The 2% tax rate on gross sales and the tax reductions apply for a period of two years and may be renewed.
Click the following link for a copy of Law no. 8/22 as published by a third party.
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