In Angola, employers have a responsibility to contribute to the National Social Security Institute (INSS). The total social security contribution rate is 11% of the employee's gross salary, with the employer's share of the contribution being 8% and the employee contributing the remaining 3%. These social security contributions cover benefits related to family, pension, and unemployment protection.

Deadlines and Reporting

Employers are required to withhold the employee's social security contribution from their wages. Both the employee and employer contributions must be paid to the INSS by the 10th of the month following the month the income was earned. Additionally, employers are responsible for submitting a monthly report to the INSS by the same deadline.

Taxable Income

Taxable income for social security and other tax calculations includes all forms of compensation, both cash and non-cash benefits. However, there are a few exceptions, which include social benefits paid by employers, holiday allowances, and contributions to complementary social protection schemes.

Other Employer Taxes

Aside from Social Security, employers should be aware of a few other potential tax obligations. These include the Employment Income Tax (PIT), where employers are responsible for withholding PIT from employee salaries under the country's progressive tax system. In some cases, municipalities or local authorities may impose additional taxes or levies on businesses. It's advisable to consult with a local tax advisor for a complete understanding.

In Angola, residents and those earning Angolan-sourced income are subjected to a progressive tax system, meaning the tax rate increases as your income rises. A portion of income is often exempt, with the exempt amount usually changing yearly. Other exemptions include family allowances (up to 5% of base salary), meal and transport allowances (up to a limit of AOA 30,000 per month), and documented business travel expenses.

Social Security Contributions

Social security is mandatory for Angolan nationals and those holding residency permits. The employee contribution is 3% of the gross salary. The employer withholds the employee's contribution and is responsible for submitting it to the Angolan Social Security authorities by the 10th of the month following the month the income was earned.

Other Potential Deductions

Angola may have consumption taxes on goods and services which can, in some cases, be deducted. Some income sources, like professional fees, are subject to a withholding tax, usually around 6.5%.

Important Considerations

Angola generally exempts foreign earnings from income tax unless your company has a registered entity there. It's required to make all employee payments from an Angolan bank account. Angolan tax laws can change, so it's important to stay up-to-date.

In Angola, the standard VAT rate is 14%. However, reduced rates of 7% apply for hotel and restaurant services that meet specific conditions. Special rates may also apply in certain cases, particularly in the province of Cabinda.

Taxable Services

Most services provided in Angola are subject to VAT. These include professional services such as legal, accounting, and consulting services, technical assistance, telecommunications services, rental of goods, transportation services, and intellectual property licensing.

Place of Supply for Services

The place of supply for services determines whether Angolan VAT applies. Generally, services are considered supplied where the customer or recipient is established or has their primary address. However, there are exceptions. Services related to real estate are taxed where the property is located. Services linked to cultural, artistic, sporting, educational, and similar events are taxed where the event takes place. Transportation services are taxed in proportion to the distance traveled within Angola.

VAT Liability for Non-Residents

Non-resident businesses providing taxable services in Angola may become liable for Angolan VAT. Under the reverse charge mechanism, the recipient of the service in Angola may be responsible for self-assessing and paying VAT. In some cases, non-resident companies may need to register for VAT in Angola. Consulting a tax advisor is essential.

Invoicing and Reporting

Businesses providing taxable services must issue VAT invoices compliant with Angolan regulations. VAT-registered businesses must file VAT returns and pay VAT due, usually on a monthly basis.

Important Considerations

Angola has specific rules for the taxation of e-commerce and the provision of digital services. Certain services are VAT exempt, such as financial and insurance services, and some medical and educational services. A simplified VAT regime exists for smaller businesses with specific turnover thresholds.

The Private Investment Law (PIL) in Angola is the main framework for investment incentives. The incentives under the PIL can vary based on factors such as the size of the investment, the sector, and the location.

Tax Incentives under PIL

Under the PIL, businesses may be eligible for partial exemptions from various taxes, including Industrial Tax (corporate tax), Property Tax, Investment Income Tax, and Stamp Duty. Additionally, businesses may be able to depreciate assets at a faster rate for tax purposes. There may also be reduced or exempt customs duties on imported equipment and raw materials.

Special Economic Zones (SEZs)

Angola has established Special Economic Zones (SEZs) that offer additional tax and administrative benefits. The Luanda-Bengo SEZ focuses on manufacturing, agriculture, and logistics. There are also other zones being developed in Angola.

Sector-Specific Incentives

There are specific incentives for the agriculture and forestry sectors, including a reduced corporate tax rate and potential customs duty exemptions. Companies operating in the oil and gas sector are subject to a specific tax regime. The mining industry also has special tax rules and potential incentives.

Incentives Based on Location

Angola is divided into development zones (A, B, C, and D), with greater incentives available for investments in less developed zones. These incentives can include tax rate reductions, accelerated depreciation, and deferral of tax payments.

Applying for Incentives

The Angolan Agency for Private Investment and Export Promotion (AIPEX) is the primary point of contact for investors seeking incentives. It can also be beneficial to engage with a local tax advisor to navigate the application process and ensure you're maximizing available incentives.

Important Considerations

Incentives under the PIL are often subject to negotiation with the Angolan government. They are typically granted for a specific period. Businesses must meet certain requirements to qualify for incentives and there are ongoing reporting and compliance obligations associated with receiving tax incentives.