The annual State Budget for 2021 was published last 31 December 2021.
The bulk of the changes introduced relate to VAT, as follows:
1.VAT
- The percentage of VAT collected put aside for reimbursement of VAT credit has been reduced from 35% to 25% - these are good news for treasury management in the public sector but assume that the level of reimbursements needed in 2020 are less than envisaged (remember that this “savings fund” for reimbursements started at 40% of collected VAT);
- VAT is maintained for year 2021 as applicable for games of chance, which had already resulted from the revised State Budget for 2020 (rendering the exemption set forth in the VAT Code non-applicable);
- The AGT is considered authorized to decide about the inclusion or exclusion of taxpayers in the list of entities subject to the “Captive VAT regime”, for reasons of protection of public revenues - these include nowadays oil operators and State bodies, banks, insurance companies and telecommunications operators – State owned companies are expressly excluded;
- Since the temporary VAT regime is no longer applicable as from 1 January 2021, a Simplified VAT regime is created for taxpayers with a turnover under AOA 350,000,000 (c. USD 500,000) for the last 12 months;
- This simplified regime translates into a 7% rate over the turnover of non-exempt operations with a right to deduct 7% of the total amount of VAT paid (including the duty to self-assess VAT on acquisition of services to non-resident service providers), and the right to reimbursement is also recognized;
- A 7% Stamp Duty over receipts under the Stamp Duty Schedule item 23.3 is created for VAT regime taxpayers, applying on VAT exempt operations (for general regime VAT taxpayers this applies only to taxpayers that exclusively perform VAT exempt operations);
- A VAT withholding regime for payments made in automatic payment terminals is created, set at a 2.5%. VAT so withheld is deductible by both simplified and general VAT regimes taxpayers (exempt taxpayers will be able to use it as an Industrial Tax credit);
- Banks are required to create the conditions for implementation of this withholding and remittance of this withheld VAT from automatic payment terminals until the end of April 2021.
2. Customs
- Thresholds for importation of small value and personal goods are introduced at AOA 880,000 (c. USD 1,300);
- Goods between said customs value and AOA 1,320,000 (c. USD 2,000) are subject to a simplified importation regime and a forfait rate of 16% customs duties;
- The customs duties rate for exportation of goods previously imported is increased to 70%, and this applying now to foodstuffs, biosecurity products, medicines and medical equipment;
- Payment in installments of customs duties where a deferred payment regime was applied is now allowed.
3. Inheritance and Donations Tax
- The rates applicable are updated to a maximum of 2% (instead of the previously applicable 30%).
4. Industrial tax withholding applicable to the petroleum sector
- Very importantly, the State Budget Law approves a temporary reduction of the WHT rate to 6.5%, solely with respect to direct payments between operators and non-resident service providers. This therefore means, in our view, that:
i. The intragroup payments of oil service providers are therefore still subject to the 15% rate;
ii. Payments occurred after 1 January 2021 and until 31 December 2021 are subject to the reduced rate (date of invoicing issues need to be further discussed);
iii. After 31 December 2021 if the regime is not renewed in the State Budget Law for 2022, the rate will be 15% (or other, if that is changed again, although this seems unlikely).
5. Status of limitations for tax year 2015
- Similarly to what had already occurred for year 2014 in the revised State Budget Law for 2020, the status of limitations is extended from 5 to 6 years for tax year 2015, until the end of 2021. This issue is not at all straightforward.
