Parliament has approved the draft law on the tax benefits code (the “law”), which aims to bring together in a single act all the tax benefits existing in Angola, their rules and conditions.
Repeal of tax benefit rules
- Certain laws granting tax advantages will be partially repealed when this law comes into force, in particular: the law on private investments; the mic. Small and Medium Enterprises Act; the law on patronage; The Law on the financing of political parties; the Angolan law on private entrepreneurship; the Capital Gains Tax Code, to name a few.
The general provisions of the law establish the rules for the granting and recognition of tax benefits, monitoring, tax reporting obligations, transfer, cancellation, duration and accumulation of tax benefits.
- Tax advantages are measures of an exceptional nature comprising an advantage or a simple tax relief compared to the ordinary tax system.
- According to the law, tax advantages can only be granted on a temporary and exceptional basis through tax exemptions, rate reductions, deductions from taxable income, tax deductions, accelerated depreciation and reconstitution, deferred payment of tax and other tax measures with an economic effect. , social, cultural and environmental.
Duration and accumulation of tax benefits
- As a general rule, the tax benefits granted have a maximum duration of 10 years, except under the contractual private investment regime, where the tax benefits can be granted for a period of 15 years.
- Tax benefits of the same nature may be combined under the same taxable event and the same tax.
The special provisions of the law establish several tax advantages for the social, environmental, financial sector, private investment, free zones, capitalization and restructuring of companies, micro, small and medium-sized enterprises (“MSME”), patrons, among others.
Tax benefits linked to the creation of jobs, internships and vocational training
- It should be noted that under the tax benefits granted to companies (Article 14), taxable persons may begin to deduct between 3 and 7 minimum salaries in the public service per job for the purposes of industrial tax and income tax. on personal income.
Tax benefits linked to private investment
- We would also like to highlight the new regime applicable to tax benefits in the context of private investment projects (following recent amendments to the law on private investment), which subdivides the tax benefits in accordance with the three (3) different regimes available under the Private Investment Law. : (i) prior declaration regime; (ii) special regime, and (iii) contractual regime. The benefits are granted in the form of reductions in property, industrial, capital gains and stamp duty taxes, among others.
Tax benefits related to micro, small and medium-sized enterprises
- MSMEs are also entitled to a reduction in the industrial tax rate for a renewable period of two (2) years. The reduction in the rate varies according to the areas in which small and medium-sized enterprises are located, unlike micro-enterprises which benefit from a flat rate of 2% on gross turnover.
Free trade zones
- Tax and customs incentives are available for companies operating in Angola’s free zones.
- Income from instruments traded on a regulated market
- Tax benefits related to the environment (use of electric cars, production and use of renewable energy)
- Benefits for the financial system and the capital markets (special regimes for pension funds, savings funds, deposits, undertakings for collective investment).
- Benefits for business capitalization and business restructuring operations
- Tax regime applicable to Patronage
The law establishes other tax advantages, including advantages for associations for public use, advantages for cooperatives and customs advantages for political parties.