Angola follows a schedular tax system. Corporate taxes in Angola are broadly classified into – industry tax (or the corporate tax), standalone tax, investment income tax, property tax, and oil income tax.
Industry tax is the tax on corporate business income, including capital gains on the sale of fixed assets. The standard rate of tax is 25% (reduced from 30% effective 19 August 2020). However, certain other rates apply as follows:
- Income from banking and insurance sectors and telecommunications operators is subject to a higher rate of 35% (increased from 30% effective 19 August 2020);
- Income from agriculture, aquaculture, apiculture, poultry, livestock, fishery, and forestry is subject to a reduced tax rate of 10% (reduced from 15% effective 19 August 2020); and
- Non-resident shipping and airline operators are exempt, provided there is a reciprocal treatment by the relevant foreign jurisdiction.
Effective 19 August 2020, two new regimes viz: general regime (based on organized accounting) and simplified regime (for taxpayers with a gross annual turnover of up to USD 250,000) are introduced under the industry tax, which replaces the below-mentioned taxpayer groups A and B.
Previously, for industrial tax purposes, taxpayers were divided into two groups:
- Group A: Consisting of public companies, private companies having a share capital of AOA 2 million and above, private companies with an annual profit of AOA 500 million and above, and permanent establishments of non-resident entities; and
- Group B: Taxpayers not included in Group A.
Group A and B taxpayers who maintain organized books of accounts and records as required under the Angolan laws were subject to industry tax on the taxable profits determined from the accounts, as adjusted in accordance with tax laws. Group B taxpayers who do not maintain adequate books of accounts were subject to turnover-based taxation, whereby expenses or other losses incurred in earning the business income are not tax deductible.
Certain non-deductible expenses (see Sec. 6.5) are subject to a stand-alone tax, effective from 2017. The additional levy of tax is in the form of an additional adjustment to the taxable income and is applicable on the following expenses:
- Improperly documented expenses - 2%;
- Non-documented expenses - 4%;
- Confidential expenses - 30% or 50% (in certain situations); and
- Donations not made in accordance with the Law of Patronage – 15%.
Investment income tax is applicable on income in the nature of interest, dividend, royalty, capital gains on the sale of shares, and other similar income.
The standard rate of investment income tax is 15%. However, reduced rates of 10% and 5% apply to certain specific types of income.
A reduced rate of 10% applies to the following types of income:
- Gains from the sale of shares and securities;
- Interest from shareholder loans; and
- Interest from current or term deposits with financial institutions and bonds.
A reduced rate of 5% applies to the following types of income:
- Capital gains on listed securities;
- Gains from the sale of or interest from bonds, securities, and other financial instruments issued by any company, treasury notes/ treasury bonds, and Central Bank securities carrying a minimum maturity period of 3 years; and
- Dividends from listed securities received during the five-year period from 19 November 2014 to 19 November 2019.
Effective 14 May 2022, a 50% reduction in investment income tax applies to the following types of income as per the new consolidated tax benefits code (Law no. 8/22):
- Profits attributable to shareholders of commercial or civil companies; and
- Repatriation of profits attributable to permanent establishments of non-residents in Angola from trading of listed shares for a period of 5 years from the date on which the shares were listed.
The following income is exempt from the investment income tax:
- Interest on deferred payments with respect to commercial transactions;
- Dividends received by resident companies from other resident companies, if the receiving company holds a participation of more than 25% in the distributing company for a period of at least 1 year prior to the date of distribution;
- Interest from financial products approved by the Ministry of Finance capped to capital invested of AOA 500,000 for each person;
- Interest from housing saving accounts; and
- Profits or dividends distributed by a listed company to another legal person that is liable to corporate income tax (even if exempt and no tax is payable), provided:
- the distributing company and the recipient have their registered office or center of effective management in Angola; and
- the recipient holds 25% or more of the capital of the distributing company for at least 1 year prior to the date of distribution.
Generally, investment income tax is levied/ collected in the form of withholding tax by the payer. However, in the case of certain specific income such as interest from credit facilities, interest on loans, and income from deferred payments, the applicable investment income tax is to be paid by the receiving entity.
Effective 9 August 2020, the new Property Tax Code replaced the Urban Property Tax Code. Under the new code, property tax is levied on all real estate assets, such as urban buildings, constructions, lands, and building plots based on the registered value or the rental income of the asset. Property tax is also levied on the transfer of the real estate. The rates are as follows:
- Urban property that is not rented is subject to property tax at the following rates based on the registered property value:
- up to AOA 5 million - 0.1%;
- over AOA 5 million to 6 million - AOA 5,000; and
- over AOA 6 million - 0.5% on the registered value above AOA 5 million
- Rented urban property is subject to property tax at a rate of 25% on the taxable rental income, which is 60% of the gross rental income (i.e., effectively 15% rate on gross rental income), although this may not be lower than property tax due based on registered value;
- Rural property is subject to property tax corresponding to a registered value of AOA 10,397 per hectare; and
- The transfer of immovable property is subject to property tax at a rate of 2%.
In cases where buildings are left vacant for more than one year or land for construction is not effectively utilized for more than three consecutive years, property tax may be increased by 50%.
Previously, urban property tax/ rental income tax was collected on urban rented as well as non-rented properties. In the case of rented properties, tax was imposed at the rate of 25% on 60% of the rental income (i.e., an effective tax rate of 15%). In the case of non-rented properties, tax was imposed at 0.5% of the taxable value of the property if the value exceeds AOA 5 million.
Income earned by companies operating in the Oil and Gas sectors is subject to tax under a special tax regime instead of the standard industry tax regime. The rates applicable under this regime are:
- 35% (reduced from 50% effective 19 August 2020) - On income earned through production-sharing agreements;
- 35% (reduced from 65.75% effective 19 August 2020) - On income earned through other types of joint ventures; and
- 30% - On income earned by Angolan resident companies who are members of the national concessionaire.
Additionally, companies engaged in exploration and production of oil and gas (other than through production-sharing agreements) are subject to Oil Production Tax at the rate of 20%. Such companies may also be liable to pay Oil Transaction Tax and Surface Surcharge, which may be levied at the rate of 70% and USD 300 per square kilometer, respectively.
Mining companies are eligible for a reduced tax rate of 25%.
Effective 1 January 2022, Angola introduced a special gaming tax at the rate of 20% on winnings from online games, provided the winnings are at least AOA 250,000. Winnings from games of chance are subject to a tax rate of 15% without any minimum threshold.