Tax laws Angola
Angola has a tax system governed by a mix of direct taxes, indirect taxes, and tax incentives to promote economic growth. The system is overseen by the General Tax Administration (AGT), which ensures compliance with tax laws and regulations. Below is an overview of Angola’s tax laws:
1. Personal Income Tax (IRPS - Imposto sobre o Rendimento das Pessoas Singulares)
- Residents of Angola are taxed on their worldwide income, while non-residents are taxed only on income earned within Angola.
- Tax rates are progressive, with higher rates applied to higher income brackets. The rates are:
- Up to AOA 1,000,000 (approx. $1,600): 0%
- AOA 1,000,001 to AOA 2,000,000: 7%
- AOA 2,000,001 to AOA 5,000,000: 10%
- AOA 5,000,001 to AOA 10,000,000: 13%
- AOA 10,000,001 to AOA 20,000,000: 16%
- AOA 20,000,001 to AOA 35,000,000: 18%
- AOA 35,000,001 and above: 20%
- Tax Deductions:
- Deductions are allowed for education expenses, medical expenses, and pensions.
- Taxpayers can also claim deductions for dependents and other allowable personal expenses.
2. Corporate Income Tax (IRC - Imposto sobre o Rendimento das Pessoas Coletivas)
The standard corporate income tax rate in Angola is 25% for most companies.
Small businesses and certain sectors may qualify for reduced rates:
- Small businesses with annual revenue under AOA 50 million may be subject to simplified tax regimes.
For businesses engaged in the oil and gas sector, a special tax regime applies, and tax rates may differ.
Withholding Tax on Dividends:
- The dividend withholding tax rate is 15%, but it may be reduced under double tax treaties.
3. Value Added Tax (VAT)
- Angola’s Value Added Tax (VAT), known as Imposto sobre o Valor Acrescentado (IVA), was introduced in 2019 to replace the previous consumption tax.
- The standard VAT rate is 14%.
- Reduced VAT rates:
- 0% for certain goods and services such as food, medical services, education, and public transport.
- The VAT regime applies to both goods and services, with exemptions available for specific sectors.
- VAT is typically paid by businesses and is passed on to consumers. Businesses are required to register for VAT if their turnover exceeds the established threshold.
4. Social Security Contributions
- Both employees and employers must contribute to the Social Security System in Angola, which covers pensions, healthcare, and other welfare benefits.
- The employee's contribution is generally 3% of their gross salary.
- The employer's contribution is typically 8% of the employee’s salary.
5. Property Taxes
- Property Tax in Angola is known as the Imposto Predial Urbano (IPU) and is imposed on the value of urban real estate.
- Rates vary depending on the location and the value of the property but generally range from 0.2% to 1% of the property value.
- Transfer Tax on Property:
- A property transfer tax of 2% is levied on the sale or transfer of property.
6. Capital Gains Tax
- Capital gains tax applies to gains from the sale of assets such as real estate, stocks, and bonds.
- The rate is generally 10% for individuals.
- Companies are subject to the standard corporate tax rate of 25% on capital gains.
7. Excise Taxes
- Angola imposes excise taxes on specific goods, including:
- Tobacco products
- Alcohol
- Petroleum and fuel
- Luxury goods
8. Customs Duties
- Angola imposes customs duties on goods imported into the country. The rates vary based on the type of goods and their origin.
- Import duties range from 0% to 30%.
- There are exemptions or reduced rates for essential goods, such as food and medicine.
9. Inheritance and Gift Tax
- Angola has an inheritance and gift tax, which applies to the transfer of assets upon death or as a gift.
- The tax rates range from 0% to 10% depending on the relationship between the deceased (or giver) and the beneficiary.
- Direct family members such as spouses and children often receive lower tax rates.
10. Environmental Taxes
- Angola has implemented various environmental taxes aimed at protecting natural resources and promoting sustainability.
- Taxes are imposed on activities that cause environmental damage, such as mining and pollution.
- Companies involved in activities that are harmful to the environment may be subject to penalties and additional taxes.
11. Double Taxation Treaties
- Angola has signed several double tax treaties (DTTs) with various countries, such as Portugal, Brazil, and South Africa, to avoid the double taxation of income. These treaties usually allow taxpayers to pay tax in one country and be exempted from paying the same tax in the other.
12. Tax Filing and Compliance
- Taxpayers in Angola, including individuals and businesses, are required to file annual tax returns and comply with reporting requirements.
- Personal income tax returns are generally due by March 31st for the previous tax year.
- Corporate income tax returns are due by June 30th for the preceding year.
Conclusion
Angola has a relatively complex tax system, with both progressive and flat rates for different types of taxes. The country offers a competitive corporate tax rate, and taxes on individuals can be relatively low, especially for low-income earners. There are also various tax incentives for businesses, especially those involved in specific sectors like mining and oil. While the country is working to modernize and diversify its economy, businesses and individuals should be aware of their tax obligations and ensure they comply with all reporting and filing requirements.
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