Angola: VAT Amendments and Special Contribution for Foreign Exchange Operations

The Angolan Parliament has approved and published in the Official Gazette, Law no. 14/23, of 28 December introducing substantial adjustments to the provisions of the VAT Code, making it more flexible, efficient, and fair both for taxpayers, in the process of assessment, declaration, payment and reimbursement of VAT credits, as well as for the Tax Administration, within the scope of its duties of tax control and supervision of the application of the VAT Code.

Law no. 14/23, of 28 December amends and republishes the VAT Code: We highlight below some of its most relevant provisions:

• Apart from the general VAT rate of 14%, the VAT Code now incorporates reduced rates of 7% (for the Simplified VAT Regime), 5% (for import and supplies of widely consumed foodstuffs and agricultural inputs) and 1% (for imports and supplies of goods subject to the Special Regime applicable to the Province of Cabinda);
• The minimum amount for requesting a VAT refund previously set at AOA 299,992.00 (corresponding to 3.409 UCF), has increased to AOA 700,000.00.
• The late submission or the non-submission of the VAT return is now subject to a penalty of AOA 600,00.00 for each infringement;
• Non-resident taxable persons who carry out taxable transactions in Angola and opt for the Simplified registration in the General Taxpayers Register are not required to appoint a tax representative, however, the conditions for access and the obligations resulting from the option for the simplified registration will be regulated in a separate diploma, to be published.
• Banks are now obliged to report to the Tax Administration, by electronic data transmission, a quarterly file containing a summary of the transactions processed through automatic payment terminals (ATP).

In addition to the above-mentioned amendments to the VAT Code, we would also like to shed a light on the reintroduction of the Special Contribution for Foreign Exchange Operations (“Contribuição Especial sobre Operações Cambiais – CEOC”) by the Angolan State Budget Law for 2024, approved by Law no. 15/23, of 29 December, applicable to transfers in foreign currency outside Angola.

It shall be due, for example, on, transfers related with agreements for the rendering of services of technical assistance, provision of services, consultancy, management or unilateral transactions. The applicable rates are of 2.5% for individuals and 10% for legal persons. 

Payments of health and education expenses, provided they are made directly into the bank accounts of the health and education institutions, as well as transfers of dividends, repayment of loan capital and associated interest are deemed exempt from the CEOC.

The CEOC is only applicable to individuals or companies domiciled or headquartered in Angola that resort to a financial banking institution to request a transfer of funds for the payment of contracts subject to this Special Contribution.