Angola Personal Income Tax

Individuals receiving work-related income and/or business and professional income in Angola are subject to per­sonal income tax if the compensation is paid by an Angolan entity or if the respective cost of such income is allocated to an entity with a head office, residence or permanent establishment in Angola. Angola applies a pure source-based system for indi­vidual taxation. Tax residency is not relevant for determining who is liable for tax in Angola.

Groups of taxation. The new tax code introduced the following three groups of taxation:

  • Group A: Income derived from employment and paid by employ­ers under the General Labor Law or civil servants regime
  • Group B: Income derived from self-employment (related to the activities included in the list attached to the Personal Income Tax Code), as well as remuneration earned by members of statutory boards
  • Group C: Income derived from industrial and commercial activities

Income subject to tax

Employment income. Taxable income includes all income consid­ered to be salaries, commissions, fees, gratifications (broadly, these are bonuses not included in base salary that reward employ­ees for good performance), allowances, premiums, allowances or ancillary forms of remuneration, such as payments in kind. These types of income are subject to tax, regardless of whether they are attributed to a contractual obligation and regardless of their fre­quency or computation method.

In addition, the following types of income are also subject to tax:

  • Shortage allowances, daily entertainment allowances and travel allowances
  • Remuneration paid to shareholders as compensation for work performed for the company
  • Remuneration of a company’s statutory board members
  • Undocumented asset increases and expenses
  • Remuneration payments by political parties and other organiza­tions with a socio-political purpose

The following types of income are not included in taxable income for personal income tax purposes:

  • Social payments made by the National Social Security Institute
  • End-of-career gratifications due under the General Labor Law
  • Shortfall allowances (per diem, representation, travel and dis­placement allowances attributed to civil servants) not exceed­ing the limits established for public officials
  • Family allowances
  • Social security contributions
  • Housing allowances, up to 50% of the rental contract amount
  • Dismissal compensation that does not exceed the maximum limits contained in the General Labor Law
  • Subsidies paid to national citizens with disabilities
  • Daily allowances, for meals and transportation, up to a total amount of AOA30,000
  • Reimbursement of expenses incurred by employees of entities subject to Industrial Tax (corporate income tax), if documented as per the Industrial Tax Code and ancillary diplomas (Legal Regime for Invoices and Equivalent Documents) and the Angola General Tax Code
  • Holiday or Christmas allowances up to 100% of the employee’s base salary

Self-employment income. Self-employed individuals are taxed on 70% of their income. For individuals with organized accounting records, the taxable income is computed based on these account­ing records after deduction of eligible deductions (see Business deductions). In certain cases, business income is subject to Industrial Tax.

Board members are taxed under the rules set forth for Group A (see Groups of taxation).

Industrial and commercial activities. The tax base for industrial and commercial activities is based on the Table of Minimum Income. However, if the taxpayer generates turnover exceeding four times the maximum amount indicated in such table for its respective activity, the tax base equals the volume of sales of goods and services not subject to withholding tax.

Under the Industrial Income Tax Code, for services subject to withholding tax, the tax base equals the value of the services (which is not included in taxable income for purposes of the preceding paragraph).

Investment income. Income derived from the use of capital is generally subject to withholding tax.

Deductions

Deductible expenses. No deductions from employment income are allowed, except for social security contributions.

Business deductions. The following expenses are deductible if prop erly documented:

  • Rent paid for business premises
  • Wages (subject to a maximum of wages paid to three employees), commissions and fees paid for services
  • Water, gas, communication services and electricity expenses
  • Insurance premiums
  • Other necessary expenses required to carry out the taxpayer’s business
  • Depreciation of the business premises

The total deduction for the above expenses is limited to 30% of the taxpayer’s total income if the taxpayer does not have an organized accounting regime.

Rates. Income tax rates applicable to taxable employment income derived by residents and nonresidents are set forth in the follow­ing table.

Exceeding AOA Not Exceeding AOA Tax on Lower Amount AOA Rate on Excess %
0 35,000 0 0
35,000 40,000 550 7
40,000 45,000 900 8
45,000 50,000 1,300 9
50,000 70,000 1,750 10
70,000 90,000 3,750 11
90,000 110,000 5,950 12
110,000 140,000 8,350 13
140,000 170,000 12,250 14
170,000 200,000 16,450 15
200,000 230,000 20,950 16
230,000 25,750 17

Remuneration received by members of statutory boards is taxed at a flat rate of 15%.

Income from self-employment is taxed at a rate of 15% (levied on 70% of gross income). As a result, the effective tax rate is 10.5%.

For income from industrial and commercial activities, the rate is 30% of the income amount established by the Table of Minimum Income, and at a rate of 6.5% in all other cases.

 

Interest on loans and late payment charges are taxed at a rate of 15%. Dividends, interest on bonds and shareholder loans, and royalties are taxed at a rate of 10%.

Under the Investment Income Tax Code, the positive difference between capital gains and losses from the disposal of securities, other than amounts subject to Personal Income Tax or Industrial Tax, is taxed at a rate of 10%.

Other taxes

Inheritance and gift tax. Inheritance and gift tax is payable by heirs and donees. This tax is levied on gratuitous transfers of movable and immovable assets and rights located or transferred in Angola. Tax rates range from 10% to 30%, depending on the value of the estate or the gift and on the relationship of the heir or donee to the deceased person or donor.

Urban property tax. Urban property tax is payable annually by the beneficiary of rental income from rented property or by the owner, usufructuary or beneficiary of surface rights of unrented property. The tax is imposed at the following rates:

  • 25% of 60% (which results in a final rate of 15%) of the rental income from Angolan rented urban property
  • 5% of the patrimonial value of unrented properties (proper­ties valued above AOA5 million

Consumption tax. The consumption tax is a combination of cus­toms excise duties and a single-stage sales tax. It is levied on goods produced in or imported into Angola, as well as on the supply of water, energy, telecommunication, tourism (including hotels and restaurants) services and many other services. The standard rate is 10%. The rate is 5% for water, energy and certain types of services. Other rates range from 2% to 80%.

Property transfer tax. Property transfer tax is levied at rate of 2% with respect to transfers of immovable property, including long­term leases (20 years or more). Stamp duty at a rate of 0.3% also applies to these transactions.

Social security

Salaries and additional remuneration specified under law are subject to social security contributions. No ceiling applies to the amount of remuneration subject to social security contribu­tions. The rates of the contributions are 8% for employers and 3% for employees.

Employees working transitorily in Angola are not required to make social security contributions if they can prove that they are covered by the social security system in another country.

Self-employed persons are subject to social security contribu­tions based on a predefined monthly notional salary. The rate of the contributions is 8%, but it may be increased to 11% if addi­tional benefits are covered.

Tax filing and payment procedures The fiscal year in Angola is the calendar year.

 

Self-employed individuals must file returns (Form M/1) in March following the tax year-end and are notified of their final tax liability.

Income taxes on employees are withheld by the employer under a Pay-As-You-Earn system, and employees are not required to file returns. The employer must file, by the end of February of the year following the tax year, a tax return, indicating the name and per­sonal details of the employees, their remuneration and corre­sponding taxes withheld.

Tax on income from capital is generally withheld by the payee entity, unless the entity is not resident or established in Angola. Otherwise, the income recipient is responsible for paying the tax.

Landlords must also file Urban Property Tax Form M/1 in January. Payments (whenever the rents are not subject to with­holding tax) must be made in two installments, which are payable in January and July. Alternatively, a request may be presented to the tax administration to make the payments in four installments, which are payable in January, April, July and October.

Tax treaties

Angola has not entered into any double tax treaties.

Temporary visas

Ordinary visas are granted to foreign citizens for business rea­sons. They can be granted for 30 days and are extendable twice, up to a maximum of 90 days. Exceptions may apply depending on the country of origin or residence. Ordinary visas do not allow the holders to perform remunerated activities in the country, for which a work visa is required.

Work visas (and/or permits)

The work visa can be granted for the duration of an employment contract for a minimum of 3 months and a maximum of 36 months. The work visa is also required for persons working at diplomatic or consular missions.

In addition, as an alternative to work visas, foreign investors can be granted privileged visas if they need to enter Angola to imple­ment their investment projects.

Residence visas (and/or permits)

On request, residence visas may be granted to foreign citizens who have a resident family member in Angola.