I. Overview
Angola is increasingly positioning itself as an attractive destination for private investment, following the enactment of the Tax Benefits Code (TBC) under Law no. 8/22 of 14 April 2022. This legislation consolidates previously dispersed tax incentives into a unified and modern legal framework, offering greater predictability and a more competitive fiscal environment for investors.
The standard Corporate Income Tax (CIT) rate in Angola is 25%, while the Investment Income Tax (IAC) is levied at a rate of 15%. The TBC allows for significant reductions to these rates depending on the type of investment, its location, and the legal regime under which it is executed.
II. Incentives for Private Investment
The TBC outlines three regimes for the granting of tax benefits: Prior Declaration, Special, and Contractual.
A. Prior Declaration Regime:
a. 20% reduction in CIT for two years.
b. 50% reduction in Real Estate Tax (RET) for property used in the investment.
c. 25% reduction in IAC on dividends and profit distributions.
d. 50% reduction in Stamp Duty.
B. Special Regime: Aimed at priority sectors (e.g., agriculture, education, renewable energy) and less developed regions:
a. CIT reduction of up to 80% for eight years in Zone C.
b. RET reduction of up to 85% for investment-related property.
c. IAC reduction of up to 80% on profit distributions.
d. Increased amortisation and reintegration rates (50%) for Zones B, C, and D.
C. Contractual Regime: Applicable to strategic projects negotiated directly with the State:
a. CIT, IAC, RET, and Stamp Duty reductions for up to 15 years.
b. Tax credit of up to 50% of the investment value for 10 years.
c. Enhanced deductions for infrastructure and accelerated depreciation in Zones B, C, and D.
These regimes are designed to boost national development and offer attractive conditions for investors, especially in the interior provinces.
III. Free Trade Zone Incentives
The TBC also provides a dedicated regime for investments in Free Trade Zones (FTZs), offering strong fiscal advantages:
a. CIT was reduced to 15% for general operations and to 8% for export-oriented activities.
b. IAC exemption on profits distributed by FTZ-based companies; 5% rate on royalties, interest, and cross-border services.
c. RET exemption on property acquisition and ownership for investment purposes.
d. Full exemption from customs duties on imports, exports, and re-exports of goods and equipment.
In addition, companies engaged exclusively in agriculture, aquaculture, livestock, and similar sectors within FTZs may benefit from a reduced CIT rate of 8%.
IV. Conclusion
Angola’s tax benefits framework provides more than just fiscal relief—it represents a strategic tool to attract investment, promote economic diversification, and stimulate regional development. For investors, it offers tangible advantages, lower entry costs, and a stable regulatory outlook.
Reference/Citation
Law 8/22 of 14 April, Tax Benefits Code (“TBC”).