The Angolan Government has released the new Personal Income Tax (“IRPS”) Code for public consultation, aiming to gather input from civil society organizations, the business sector, and professional associations.
The proposed IRPS is expected to significantly impact, among others, international mobile employees, as it may give rise to dual residency conflicts and situations of international double taxation of income.
The Angolan Government has released the new Personal Income Tax (“IRPS”) Code for public consultation, aiming to gather input from civil society organizations, the business sector, and professional associations. The public consultation will remain open until April 30th, followed by listening and debate sessions hosted by the Tax Administration with various stakeholders throughout May and June.
The proposed IRPS represents a significant shift in the taxation system for individuals in Angola, with the following key aspects standing out:
• Tax residency in Angola will be determined based on the individual’s physical presence in Angolan territory. Anyone who stays in the country for more than 90 days — whether consecutively or intermittently — within any 12-month period beginning or ending in the relevant year will be considered tax resident in Angola. All members of a household are considered tax residents, provided that at least one of the individuals responsible for the household is a tax resident in Angola.
• Angolan tax residents will be subject to taxation based on a worldwide income taxation model, while for Angolan non-tax residents is maintained a territorial taxation model i.e. only liable to tax on income from Angolan sources.
• The IRPS will apply to various types of income, divided into five categories:
Category A: Employment income
Category B: Business and professional income
Category C: Investment income
Category D: Rental income
Category E: Capital gains and other increases in net worth
• Generally, the tax due by tax resident individuals will be determined by aggregating all income earned, which will be subject to marginal rates of up to 25%. Investment income will be an exception, as it will be subject to tax rates of 10% or 15%. The tax withheld at source is treated as a payment on account of the final tax liability assessed upon filling of an annual income tax return.
• As a rule, taxpayers will be required to submit an annual income tax return electronically, by March 15th of the year following the one the income relate. This obligation is waived in cases where the individual has earned exclusively employment income (Category A) from a single employer, in which case the withholding tax applied by that employer is considered final.
• Tax resident individuals who earn income from foreign sources in countries with which Angola has signed an agreement to eliminate double taxation will be entitled to a tax credit to mitigate international double taxation.
For a deeper discussion on the above, please reach out to your Vialto Partners point of contact, or alternatively:
Ana Duarte
Partner
Pedro Niza
Director
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