AngolaTax Obligations Detailed

In Angola, employers face various tax obligations and statutory requirements related to payroll, social security, and other contributions.

Employer Taxes and Contributions

• Social Security: Employers contribute 8% of the employee's gross monthly salary to the National Social Security Institute (INSS).
• Corporate Income Tax (CIT): The standard CIT rate is 25%, also known as Industrial Tax. Specific sectors like agriculture, mining and oil operations, might be subject to different CIT rates.
• Withholding Tax: A 6.5% withholding tax applies to payments for services rendered to both resident and non-resident entities. Certain services may be exempt.
• Value Added Tax (VAT): A standard VAT rate is 14%.

Employee Payroll Taxes and Deductions

• Personal Income Tax (PIT): Employees are subject to PIT at progressive rates ranging from 0% to 25% of their monthly earnings. Income up to Kz 100,000.00 is exempt. The tax is withheld at the source by the employer under the pay-as-you-earn (PAYE) system. Employees whose sole income is employment income are not required to file annual tax returns.
• Social Security: Employees contribute 3% of their gross monthly remuneration to INSS.

Payroll Cycle and Compliance

• Payroll Frequency: Salaries are typically paid monthly.
• Tax Year: The tax year aligns with the calendar year, ending on December 31st.
• Filing Deadlines: Employers must remit withheld PIT and social security contributions by the end of the month following the payment of salaries. Annual CIT returns are due by the last business day of April for companies under the simplified regime and by the last business day of May for companies under the general regime.
• Tax Compliance: It is always the entity that pays the income (salary, wage, or fee) that must deal with the tax administration. The paying entity must withhold the tax and subsequently remit it to the tax administration. Personal income tax must be paid by the end of following the month in which the personal income was paid.

Additional Considerations

• Employment Contracts: Written employment contracts are mandatory, outlining key details such as employee name and address, salary, start date, and payment method.
• Tax Exemptions and Allowances: Specific allowances, such as travel and accommodation, social allowances, maternity and other benefits, may be exempt from or partially exempt from PIT, subject to certain limits.
• Foreign Employees: Unless covered by a foreign social security scheme, foreign employees are also required to register with INSS and make contributions.

Information is current as of February 5, 2025, and is subject to change.

In Angola, employee tax deductions encompass various areas, including income tax, social security contributions, and certain allowable exemptions.

Income Tax

Income tax in Angola is progressive, ranging from 0% to 25% based on annual income. The tax is applied to an employee's gross income after deducting social security contributions.

Social Security

Employees contribute 3% of their gross salary to social security. The employer's contribution is 8% of the employee's gross salary. This 8% employer contribution is considered a pre-tax deduction when calculating the employee's income tax.

Allowances and Exemptions

Certain allowances and benefits are exempt from income tax, fully or partially, including:

• Family allowances: Up to 5% of the base salary is exempt.
• Meal and transport allowances: Up to AOA 30,000 per month for each allowance is exempt.
• Business travel expenses: Documented business travel expenses incurred by the employee are exempt.
• Housing allowances: Up to 50% of the rental contract value can be exempt, provided the rental contract is submitted to tax authorities.

It is important to note that these rates and regulations are subject to change. As of today, February 5, 2025, this information is current, but it's advisable to consult official government resources or tax professionals for the most up-to-date details.

In Angola, the Value Added Tax (VAT) system, known as Imposto sobre o valor acrescentado (IVA), was implemented in October 2019, replacing the previous Sales Tax.

VAT Rates

• Standard Rate: 14% (applicable to most goods and services, including SaaS and digital services).
• Reduced Rate: 5/7% (applies to specific food items, agricultural consumables, and, under certain conditions, hotel accommodations and restaurant services).
• Cabinda Zone Rates: 2% (specific goods and services like port services, public water supply) and 1% (food products).
• Simplified Regime Rate: 7% (calculated on monthly turnover for businesses with annual turnover between AOA 10,000,000.00 and 350,000,000.00).

VAT Registration

• Threshold: Businesses with an annual turnover or import volume exceeding AOA 350,000,000 are generally required to register for the standard VAT regime. Those in manufacturing must register if their annual turnover or import operations exceed AOA 25,000,000.
• Simplified Regime: Businesses with turnover between AOA 10,000,000.00 and 350,000,000.00 can opt for the simplified regime.
• Non-Residents: No threshold exists; they must register if providing taxable services in Angola. A simplified registration process is available for online merchants without a fiscal representative.
• Voluntary Registration: Businesses with annual turnover less than ALL 10 million but greater than ALL 5 million may voluntarily register for VAT but must remain registered for two years. Businesses engaged in import/export activities must register regardless of their annual turnover.

VAT Filing and Payment

• Returns: Monthly VAT returns are required.
• Deadline: VAT payment is due by the end of the month following the taxable transactions.
• Invoicing: Invoices must be issued within five business days of the supply and include specific details such as supplier and customer information, VAT amount, etc. Electronic invoicing systems are in place.

Exemptions and Zero-Rated Supplies

• Exemptions: Medicinal products, education services, healthcare services, certain medical equipment and mobility aids for the disabled, books (including digital formats), basic foodstuffs, financial services, real estate (except hotel accommodations), gaming, public transport, petrol.
• Zero-Rated: Exports.

Key Changes from 2024 Law No. 14/23:

• E-commerce: Sales are taxable in Angola if the buyer's headquarters, residence, or permanent establishment is in Angola or if payment is made within Angola, irrespective of the shipping origin. This impacts both B2B and B2C transactions.
• Deductions: Exports and exempt transactions under the general VAT regime and the special customs regime are now eligible for deductions. Miscellaneous exempt goods are no longer eligible. The deadline for claiming deductions is now 12 months from the invoice issuance date.
• Captive VAT: Public entities (excluding public companies) can now apply captive VAT to import transactions.

2025 Budget Law Changes:

• Reduced VAT rate of 5% on imports and transfers of industrial equipment by manufacturers (subject to approval by the tax authority).
• Regime change required by the end of the month following the exceeding of turnover or import thresholds for exclusion and simplified regimes.

This information is current as of February 5, 2025, and is subject to change as tax laws and regulations evolve. It's recommended to consult with a tax professional for personalized advice.

Angola offers a range of tax incentives to attract and encourage investment, primarily governed by the Private Investment Law. These incentives vary based on the investment regime chosen: Contractual, Special, or Prior Declaration.

Contractual Regime

This regime applies to investments exceeding USD 1 million. Investors can negotiate specific incentives within established legal limits. These may include:

• Corporate Income Tax (CIT), Individual Income Tax (IIT), and Stamp Tax reductions for up to 15 years.
• Tax credits up to 50% of the investment amount for a maximum of 10 years.
• Increased depreciation and reinstatement rates (up to 80%) for investments in designated zones (B, C, and D) for up to 10 years.
• Deferral of tax payments.
• Recognition of 80% of infrastructure investment costs (normally government responsibility) as project costs.

Special Regime

This regime targets investments below USD 1 million in specifically listed priority sectors. Benefits are granted automatically based on the investment zone (A, B, C, or D). Benefits include exemptions from fees and charges for public services (excluding utilities). Expedited procedures are available through the Investment and Exports Promotion Agency of Angola (AIPEX). Reinvestment of profits within three years in new installations or equipment offers deductions from taxable income for five years (up to 80% depending on location).

Prior Declaration Regime

This regime covers investments outside the priority sectors listed under the Special Regime. Benefits are granted automatically and include a 50% reduction in Property Tax for properties used as offices or establishments. For a period of two years, additional benefits apply:

• 20% reduction in CIT
• 25% reduction in IIT on dividends
• 20% reduction in Industrial Tax
• 50% reduction in Stamp Tax
• 25% reduction in Capital Application Tax

Further facilities regarding permits, visas, utilities, etc., may also be available. Additional tax benefits and incentives exist outside the Private Investment Law. These include incentives related to job creation (deductions based on the lowest civil servant wage), internships, professional training, environmental initiatives (electric vehicles, renewable energy), and specific sectors like incremental oil production.

It's crucial to note that this information is current as of February 5, 2025, and specific regulations and incentives can change. Consulting with a tax advisor or AIPEX directly is recommended for the most up-to-date details.