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Angola - Income Tax

Angola - Income Tax

Taxation of international executives

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Tax Returns and Compliance

When are tax returns due? That is, what is the tax return due date?

Employees are not required to submit tax returns.

What is the tax year-end?

31 December.

What are the compliance requirements for tax returns in Angola? 

Residents and Non-Residents

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 the month following the month in which the personal income was paid.

Tax Rates

What are the current income tax rates for residents and non-residents in Angola?

Residents and Non-Residents

Income tax table for 2019

Taxable
income bracket
Tax rate on income in bracket
From AOA To AOA Percent
0 34,450 Exempt
34,451 40,000
AOA550 + 7% of the amount exceeding AOA35,000
40,001 45,000 AOA900 + 8% of the amount exceeding AOA40,000
45,001 50,000 AOA1,300 + 9% of the amount exceeding AOA45,000
50,001 70,000 AOA1,750 + 10% of the amount exceeding AOA50,000
70,001 90,000 AOA3,750 + 11% of the amount exceeding AOA70,000
90,001 110,000 AOA5,950 + 12% of the amount exceeding AOA90,000
110,001 140,000 AOA8,350 + 13% of the amount exceeding  AOA110,000
140,001 170,000 AON12,250 + 14% of the amount exceeding  AOA140,000
170,001 200,000 AOA16,450 + 15% of the amount exceeding AOA170,000
200,001 230,000 AOA20,950 + 16% of the amount exceeding AOA200,000
230,001 Above AOA25,750 + 17% of the amount exceeding AOA230,000

Note: 1.00 US dollar (USD) = AOA308.31

Tax Rates Applicable to Employees

Employees are subject to personal income tax at these rates in respect of their total remuneration.

The taxable income is determined by deducting from the gross earnings the mandatory contributions to Social Security and the remuneration components not subject or exempt from PIT.

This rule is also applicable to earnings of directors and members of the board or of other statutory bodies (even if said persons are classified under the taxation Group B).

Tax Rates Applicable to Independent (Self-Employed) Professionals

Any entity making payments to an independent professional (including directors and members of the board or of other statutory bodies) is required to withhold personal income tax at a flat rate of 15 percent. The taxable income corresponds to 70 percent of the earnings, when these are paid by companies or by individuals with organized accounting; for the remaining cases, the income is determined based on the accounting, on the taxpayers’ accounting records, on records available for the purchases, sales and services rendered, or on the information the Tax Administration has available.

Residence Rules

For the purposes of taxation, how is an individual defined as a resident of Angola?

In Angola the only criterion for the applicability of personal income tax is the source of the income. As mentioned earlier, only income earned in Angola attracts personal income tax. Residency is therefore irrelevant.

It should be noted that, in the event that an employee of a foreign entity renders services in Angola for a period of time exceeding 90 days, this may create a permanent establishment of the foreign entity in Angola. As a result, said foreign entity will be subject to all Angolan taxation. 

Is there, a de minimus number of days rule when it comes to residency start and end date? For example, a taxpayer can’t come back to the host country/territory for more than 10 days after their assignment is over and they repatriate.

There is no de minimus number of days rule in Angola.

What if the assignee enters the country/territory before their assignment begins?

This does not make a difference as there is no de minimus number of days rule.

Termination of Residence

Are there any tax compliance requirements when leaving Angola?

Not applicable in Angola.

What if the assignee comes back for a trip after residency has terminated?

Not applicable in Angola.

Communication between Immigration and Taxation Authorities

Do the immigration authorities in Angola provide information to the local taxation authorities regarding when a person enters or leaves Angola?

Currently this is not happening. This could change any time if the authorities gain the capacity to do so.

Filing Requirements

Will an assignee have a filing requirement in the host country/territory after they leave the country/territory and repatriate?

Not applicable in Angola.

Economic Employer Approach

Do the taxation authorities in Angola adopt the economic employer approach to interpreting Article 15 of the Organisation for Economic Co-operation and Development (OECD) treaty? If no, are the taxation authorities in Angola considering the adoption of this interpretation of economic employer in the future?

Yes.

De minimus Number of Days

Are there a de minimus number of days before the local taxation authorities will apply the economic employer approach? If yes, what is the de minimus number of days?

Not applicable in Angola.

Types of Taxable Compensation

What categories are subject to income tax in general situations?

As a general rule, all types of compensation and benefits received by an individual for services rendered constitute taxable income subject to personal income tax including, but not limited, to the following:

  • salaries and wages
  • benefits-in-kind
  • cost-of-living allowances
  • housing allowances.

Intra-group statutory directors

Will a non-resident of Angola who, as part of their employment within a group company, is also appointed as a statutory director (i.e., member of the Board of Directors in a group company situated in Angola trigger a personal tax liability in Angola, even though no separate director's fee/remuneration is paid for their duties as a board member?

In case any part of their remuneration is paid/borne by an Angolan entity, taxation should arise in Angola.

a) Will the taxation be triggered irrespective of whether or not the board member is physically present at the board meetings in Angola?

Yes.

b) Will the answer be different if the cost directly or indirectly is charged to/allocated to the company situated in Angola (i.e., as a general management fee where the duties rendered as a board member is included)?

Yes, in that case taxation in Angola should arise.

c) In the case that a tax liability is triggered, how will the taxable income be determined?"

The taxable income should correspond to the total income paid/recharge to the Angolan entity.

Tax-Exempt Income

Are there any areas of income that are exempt from taxation in Angola? If so, please provide a general definition of these areas. 

The following items are expressively excluded from tax:

  • Social benefits paid by Social Security of a mandatory social protection nature
  • Allowances paid to employees who handle with cash and are personally liable for shortfalls, up to the legal limits established for civil servants
  • Family allowance paid by the employer entity up to the limit of 5 percent of the employee’s monthly base salary
  • Contributions to the social security
  • Housing allowance up to the limit of 50 percent of the amount of the rent, provided the employee files a copy of the rental contract with the competent Tax Office, within 15 days of its signature. In the event that a copy of the contract is not filed with the referred authorities, personal income tax will be due by the employee on the full amount of the rental subsidy received
  • Severance payments made to employees for employment contract termination (regardless of the objective cause) up to the maximum ceilings foreseen in the Labor Law
  • Meal and transport allowances paid to the employees up to the total limit of AKZ 30,000
  • Reimbursement of business expenses incurred by employees of entities subject to industrial tax (or to other special tax regimes) provided that such expenses are duly documented
  • Holiday and Christmas allowances up to the limit of 100 percent of the employee’s base salary.

Expatriate Concessions

Are there any concessions made for expatriates in Angola?

There are no specific concessions for expatriates.

Salary Earned from Working Abroad

Is salary earned from working abroad taxed in Angola? If so, how?

Income earned from working abroad is not subject to tax, unless it is paid or borne by the Angolan company.

Taxation of Investment Income and Capital Gains

Are investment income and capital gains taxed in Angola? If so, how?

Capital gains

Capital gains earned by an individual are not subject to taxation on personal income tax.

Dividends, Interest, and Rental Income

Dividends, interest and rental income earned by an individual are not subject to taxation on personal income tax.

Gains from Stock Option Exercises

The Angolan employment income tax code does not provide any specific criteria to calculate the related income neither when the taxable event takes place. 

Nevertheless, under the applicable rules, compensation and benefits paid in cash or in kind by the employer to the employees are deemed as taxable income and it is the employer’s requirement to withhold the tax due and pay it to the tax authorities. In addition, please note that the benefits in kind should be computed by its cost for the employer entity. 

That said, the income derived from stock options should be considered as taxable employment income subject to withholding provide that the related cost is recharged the Angolan entity.

Foreign Exchange Gains and Losses

Income is taxed at the conversion rate ruling at the date of payment of the salary.

Principal Residence Gains and Losses

Not applicable.

Capital Losses

Not deductible.

Personal Use Items

Not considered for deduction. Taxable as a benefit if paid by employer.

Additional Capital Gains Tax (CGT) Issues and Exceptions

Are there additional capital gains tax (CGT) issues in Angola? If so, please discuss?

None.

Are there capital gains tax exceptions in Angola? If so, please discuss?

Pre-CGT Assets

Not applicable.

Deemed Disposal and Acquisition

Not applicable.

General Deductions from Income

What are the general deductions from income allowed in Angola?

Social security contributions.

Tax Reimbursement Methods

What are the tax reimbursement methods generally used by employers in Angola?

N/A

Calculation of Estimates/Prepayments/Withholding

How are estimates/prepayments/withholding of tax handled in Angola? For example, Pay-As-You-Earn (PAYE), Pay-As-You-Go (PAYG), and so on.

PAYE.

This withholding is final.

Pay-As-You-Go (PAYG) Withholding 

Not applicable.

When are estimates/prepayments/withholding of tax due in Angola? For example, monthly, annually, both, and so on.

Monthly.

Relief for Foreign Taxes

Is there any Relief for Foreign Taxes in Angola? For example, a foreign tax credit (FTC) system, double taxation treaties, and so on.

Angola does not have any double taxation treaties with any country/territory. No foreign credit system exists as the PAYE system is final.

General Tax Credits

What are the general tax credits that may be claimed in Angola? Please list below.

None.

Sample Tax Calculation

This calculation assumes a married taxpayer resident in Angola with two children whose 3-year assignment begins 1 January 2017 and ends 31 December 2019. The taxpayer’s base salary is USD100,000 and the calculation covers 3 years.

  2017 USD 2018 USD 2019 USD
Salary 100,000 100,000 100,000
Bonus 20,000
20,000 20,000
Cost-of-living allowance 10,000 10,000 10,000
Housing allowance 12,000 12,000 12,000
Car allowance 6,000 6,000 6,000
Moving expense reimbursement 20,000 0 20,000
Home leave 0 5,000 0
Education allowance 3,000 3,000 3,000
Interest income from non-local sources 6,000 6,000 6,000

Exchange rate used for calculation: USD1.00 = AOA308.31 (this same rate was used for the calculation for of the years 2017, 2018 and 2019).

Other Assumptions

Other Assumptions:

  • All earned income is attributable to local sources.
  • Bonuses are paid at the end of each tax year, and accrue evenly throughout the year.
  • Interest income is not remitted to Angola.
  • Car allowance
  • The employee is deemed resident throughout the assignment.
  • Tax treaties and totalization agreements are ignored for the purpose of this calculation.
  • The remuneration accrues evenly throughout the year.

Calculation of Taxable Income

Year ended 2017
2018
2019
Days in Angola during year
366 365 365
Earned income subject to income tax      
Salary 30.831.048,03 30.831.048,03 30.831.048,03
Bonus 6.166.209,61 6.166.209,61 6.166.209,61
Cost-of-living allowance 3.083.104,80 3.083.104,80 3.083.104,80
Net housing allowance 3.699.725,76 3.699.725,76 3.699.725,76
Car allowance 1.849.862,88 1.849.862,88 1.849.862,88
Moving expense reimbursement 0 0 0
Home leave 0 1.541.552,40 0
Education allowance 924.931,44 924.931,44 924.931,44
Total earned income 46.554.882,52 48.096.434,92 46.554.882,52
Other income 0 0 0
Total income 46.554.882,52 48.096.434,92 46.554.882,52
Deductions: 924.931,44 924.931,44 924.931,44
Total taxable income 45.629.951,08 47.171.503,48 45.629.951,08

Calculation of Tax Liability

  2017 AOA 2018 AOA 2019 AOA
Taxable income as above 45.629.951,08 47.171.503,48 45.629.951,08
Angolan tax thereon 7.743.741,68 8.005.805,59 7.743.741,68
Less:      
Domestic tax rebates (dependant spouse rebate) 0 0 0
Foreign tax credits 0 0 0
Total Angolan tax 7.743.741,68 8.005.805,59 7.743.741,68

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