New consumer and import taxes in Angola introduced on 1 July

27 May 2019

Value Added Tax (IVA in Portuguese) is due to come into force on 1 July in Angola, as part of a broad reform of the tax system, which includes a new consumer tax, according to the Legis-PALOP+TL legal database.

Once approved, the IVA Code provides for a single rate of 14% on all goods imports and for all large taxpayers (income over 15 million kwanzas) along with large public enterprises and banking financial institutions.

The tax also covers insurers and reinsurers, pension fund management companies, service providers and service operators in the payment system, microcredit companies, oil companies, diamond companies with a revenue of 5 billion kwanzas or more, telecommunication operators and companies operating under a monopoly.

From 1 January 2021 it will be compulsory for all other taxable entities that are not large taxpayers, but these may also opt to be covered by the general taxation regime of the new IVA Code as of 1 July.

Those who choose to comply with the new IVA Code only after 1 January 2021 will be covered until that date by a transitional scheme, which stipulates that in 2019 and 2020 they will be subject to simplified taxation, provided they have revenue or import operations of a value higher than the amount predicted for micro-enterprises, or the equivalent of 250,000 euros.

These taxpayers, on an exceptional basis, when acquiring services from non-resident providers should pay tax according to the general tax regime.

IVA is levied on the purchase of goods, including electricity and gas, on services supplied in the national territory and on all imports of goods.

Books, including in digital format, medicines, property rentals, games of chance, collective passenger transport, insurance and oil products, imports of goods or equipment for oil and gas operations and imports into duty-free zones are all exempt from IVA.

On 1 July, the Special Consumption Tax Code (IEC) comes into force, which is compulsory for all entities engaged in production operations, whatever the processes or means used and goods imported.

The IEC rates will be 2% for non-alcoholic beverages, unprocessed tobacco, fireworks, and jewellery, among others, 16% for alcoholic beverages and tobacco and 19% for aircraft and recreational craft.

Legis-PALOP+TL reports that the IEC rate for oil products on imports and domestic production is 2%, with 5% for non-aircraft and diesel fuels.

The new Income Tax Code is already in force and stipulates that the distribution of profits to company partners, with or without commercial form, and income earned by members of boards shall also be subject to taxation. (Macauhub)