Angola amends VAT System – Introductions
Angola’s legislative body has taken significant steps to refine its tax framework, enacting Law no. 14/23 on 28 December, which revises the VAT Code, and Law no. 15/23, reintroducing the Special Contribution for Foreign Exchange Operations (CEOC).
These measures aim to optimize the VAT system, making it more adaptable, efficient, and equitable for both taxpayers and the Tax Administration, while also addressing specific foreign exchange transactions.
Key VAT Code Amendments
General
The newly amended VAT Code introduces several critical changes designed to alleviate the tax burden on certain goods and transactions, improve the refund process for taxpayers, and enhance compliance and administrative efficiency:
Diversified VAT Rates
The general VAT rate remains at 14%, but new reduced rates have been incorporated, including 7% for the Simplified VAT Regime, 5% for the import and supply of widely consumed foodstuffs and agricultural inputs, and 1% for imports and supplies within the Special Regime applicable to Cabinda Province.
Adjusted VAT Refund Threshold
The threshold for VAT refund requests has been increased from AOA 299,992.00 to AOA 700,000.00, facilitating greater recovery of VAT credits for businesses.
Penalties for Late VAT Return Submission
The non-submission or late submission of VAT returns now incurs a penalty of AOA 600,00.00 per infringement, aiming to improve compliance rates.
Simplified Registration for Non-Resident Taxpayers
Non-resident entities engaging in taxable activities in Angola can now register in the General Taxpayers Register without appointing a tax representative, subject to forthcoming regulatory conditions and obligations.
Mandatory Bank Reporting
Banks are required to electronically report quarterly summaries of transactions processed through automatic payment terminals to the Tax Administration, enhancing transparency and oversight.
Special Contribution for Foreign Exchange Operations (CEOC)
Alongside the VAT modifications, Law no. 15/23 reintroduces the CEOC, targeting transfers in foreign currency outside Angola.
This levy applies to transactions such as technical assistance, service provision, consultancy, management, or unilateral transactions, with rates set at 2.5% for individuals and 10% for legal entities.
Exemptions from the CEOC include payments for health and education expenses (if paid directly to the institutions’ bank accounts), transfers of dividends, and repayments of loan capital and associated interest.
The CEOC aims to regulate foreign exchange operations more tightly, ensuring a fair contribution from transactions impacting Angola’s financial reserves.
Angola amends VAT System – Conclusion
These legislative updates signify Angola’s commitment to refining its tax system to support economic growth, enhance tax compliance, and maintain a balanced approach to foreign exchange transactions.
Businesses operating within Angola, particularly those involved in importation, supply of goods, and cross-border transactions, will need to adjust to these changes to ensure compliance and optimize their tax positions.
Meanwhile, the reintroduction of the CEOC underscores the importance of careful planning for international payments and financial operations involving Angola.
Final thoughts
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