As announced in our WTS Global VAT Newsletter for Q4 2018, Angola will implement its own Value Added Tax Code on 1 July 2019 (Law no. 7/19 dated 24 April 2019).
In this context, we would like to highlight the following:
The Value Added Tax (VAT) Code will enter into force on 1 July 2019 in Angola and applies mandatorily to all taxpayers registered with the Major Taxpayers Tax Office and to the importation of goods. Taxpayers registered at other tax offices, with a turnover or importation of goods of more than USD 250,000, will be subject to an interim regime during FY2019 and FY2020. Nevertheless, taxpayers may choose to join the standard VAT regime, upon fulfilling certain requirements. The VAT Code will apply mandatorily to all taxpayers in 2021.
According to the VAT Code, all transmissions of goods and supplies of services effected for consideration, in national territory, by a taxable person and the importation of goods are subject to VAT, except certain transmissions of goods exempt of VAT, such as the transmission of essential goods, operations subject to real estate transfer tax (“SISA”) and the collective transport of passengers, amongst others.
The VAT Code sets forth a flat VAT rate of 14%. For taxpayers subject to the interim regime, the VAT is computed by applying a tax rate of 7% to the total amount of sales and/or services rendered and reported for the previous three months, with the right to deduct up to 4% of the VAT borne on the acquisition of goods and services that are listed on the suppliers table (see below). In the event that this deduction is higher than the VAT assessed, no refund is granted.
Taxpayers under the interim regime should submit, no later than the last day of the following month, a suppliers table listing all transactions completed in the previous month in connection with acquisitions of goods or services from taxpayers covered by the standard VAT regime, as well as concerning acquisitions of services from non-resident service suppliers.
Taxpayers under the standard VAT regime should submit, each month, the periodic declaration and its attachments regarding the transactions completed in the previous month, with the indication of the tax due or tax credit, as well as supporting evidence for its computation. For these taxpayers, when the tax deduction is higher than the VAT computed, the excess is deducted over the subsequent periods. If, after a three-month period in which the excess has been verified, the tax credit remains and is higher than 3,409 UCFs (fiscal correction units – roughly AKZ 300,000.00 at the time of writing), the taxpayer may request a corresponding VAT refund, without prejudice to the documents that led to the tax credit being inspected.
The non-submission or late submission of the VAT electronic return is subject to a penalty of 5,862 UCFs (roughly AKZ 515,856.00 at the time of writing) per infraction, regardless of the payment of the tax due or not submitted as a consequence of the transgression, it being the case that when committed intentionally, the above-mentioned penalty will double. If the infraction is settled during the 30 days immediately following the deadline, the penalty will be reduced to half of its amount.
Moreover, we would like to highlight the introduction of the captive VAT regime, which comprises the withholding (and payment to the Treasury) by the purchaser of goods and services of the VAT levied on those supplies and included in the invoice or equivalent document. The captive VAT regime applies to oil companies, State and local authorities (except state-owned enterprises), which must withhold 100% of the VAT charged on the goods and services they acquire, as well as the National Bank of Angola, commercial banks, insurers and reinsurers and telecommunications operators, which must withhold 50% of the VAT charged on the goods and services they acquire. However, the captive VAT regime does not apply to services provided by commercial banks.
In line with the implementation of VAT in Angola, other related legislative changes have entered into force, such as the revocation of the Regulation of Consumption Tax (Presidential Decree no. 3-A/14, dated 21 October), Stamp Duty (item no. 15 of the table attached to the Presidential Decree no. 3/14, dated 21 October) and Stamp Duty on Customs Duties. Amendments to the PIT Code (Law no. 9/19 of 24 April) have also entered into force, amongst others.
Finally, as also announced in our WTS Global VAT Newsletter for Q4 2018, Angola has introduced a new tax – the Special Consumption Tax (Imposto Especial de Consumo – IEC).
The Special Consumption Tax Code (Law no. 8/19 of 24 April) has also been published and is due to enter into force on 1 July 2019. It applies to various products such as alcoholic beverages, tobacco, collector vehicles, petroleum products and others. Special Consumption Tax applies to all products produced or imported in Angola. The tax rates may vary (between 2% and 19%) depending on the type of product and are listed in tables (ANEXO I & ANEXO II) attached to the Special Consumption Tax Code.
email: fatima@fcarreiro consulting.com