The first Tax Benefits Code (“TBC”) was approved by Law no. 8/22 of 14 April, and establishes a structured set of rules to which the creation and granting of tax benefits must adhere.
This statute exhaustively regulates all tax benefits that used to be included in other laws (i.e. Private Investment Law, Patronage Law, Micro, Small and Medium Enterprises Law, among others). It lists the laws revoked, including notably the rule on elimination of economic double taxation in the Investment Income Tax Code.
The procedures for recognition of conditions to access the tax benefits provided for in these diplomas remain therein regulated. Any benefits not included in the TBC shall be approved solely in the annual State Budget Law.
The TBC provides for the creation of a return to report tax benefits, to be approved by a specific administrative act. Beyond systematization of the tax benefit already existing in different statutes, the TBC creates, among others, the following benefits:
Job Creation, Internship and Professional Training
Additional deductions in terms of income tax, indexed to the lower salary for public officials, for entities that create new jobs, doubling the benefit when the position is occupied by a woman
25% additional on top up of expenses regarding training of employees
Environment
50% reduction of the rate of customs duties on the import of electric vehicles, until 2032
75% reduction of the rate of Property Tax in the acquisition of buildings exclusively used for the production of energy from renewable sources
50% reduction of the rate of Property Tax on the ownership of buildings exclusively used for the production of energy from renewable sources
35% reduction of the Industrial Tax rate for taxpayers engaged in the production and sale of energy from renewable sources
60% reduction of the Investment Income Tax rate on income derived from renewable energy production and commercialisation activities
Financial System and Capital Markets
Pension funds operating under Angolan law shall enjoy the following benefits:
o Reduction of the Industrial Tax rate to 14%
o 50% temporary reduction of the Property Tax rate on onerous or gratuitous transfers, ownership and rents
o Exemption from Investment Income Tax on income derived from funds
60% reduction of the rate of Investment Income Tax on interests paid on deposits made by non-resident entities (in an amount equal or exceeding AOA 50 million and at least 2-year maturity)
Increase, to 10%, of the rate of Industrial Tax for Undertakings for Collective Investment in Transferable Securities
Private Investment - Contractual Regime
Reduction of the rates of Industrial Tax, Property Tax, Investment Income Tax, Stamp Duty for a period of up to 15 years
Tax credit up to 50% of the investment amount, for a period of up to 10 years
Increase of up to 80% in depreciation and reinstatement rates, for a period of up to 10 years
This regime may also be applicable, upon recognition by the Tax Authority, to PPP projects.
Free Trade Zones
Reduction of Industrial Tax rate to 15%, or 8% in special cases such as activities for export and primary sector
Exemption from Investment Income Tax for profits deriving from activity carried out in Free Trade Zones
Reduction of the Investment Income tax on capital operations, to 5%
Exemption of Property Tax for the acquisition and ownership of buildings located in Free Trade Zones
Customs exemptions, except regarding fees for services rendered
Incentives are also created regarding conventional remuneration of share capital and restructuring or cooperation operations.
Finally, we stress that the Tax Benefits Code does not apply to the special regimes for the petroleum and mining sector.
The TBC will become effective on 14 May 2022.
