Global Tax Alert | 15 October 2013

Angola issues Presidential Decrees regarding large taxpayers regime and invoicing requirements

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Executive summary

The Angolan Official Gazette (Diário da República) dated 1 October 2013 published two significant Presidential Decrees:

  • Presidential Decree No. 147/13, which sets forth specific rules governing the tax regimes to be applicable to large taxpayers in Angola; and
  • Presidential Decree No. 149/13, governing the requirements to be applicable when issuing invoices or equivalent documents.

Statute of Large Taxpayers

Presidential Decree No. 147/13 defines the concept of large taxpayers, their rights and duties, as well as the new structure, competencies and functions of the Tax Office dedicated to this group of taxpayers. The Presidential Decree also introduces two special tax regimes applicable to large taxpayers: (i) group taxation regime and (ii) specific transfer pricing rules.

This legislation entered into force 7 October 2013. Penalties and other consequences related with this regime will be set forth in the new General Tax Code, which has not yet been enacted.

Group Taxation regime

Angolan Large Taxpayers, integrated in a group of companies, may be taxed under a tax grouping regime, upon election. The group's taxable basis shall correspond to the sum of the taxable profits and losses obtained by each of the entities included in the group's perimeter, under the conditions set forth in the law.

Transfer pricing rules

The National Director of Taxes (DNI) is empowered to proceed with any adjustment to the taxable basis, whenever the conditions and prices agreed to by the taxpayers and the companies with which they have “special relations” are different from the ones established with independent entities (arm's length principle).

Under these rules, any Large Taxpayer whose yearly revenues at the date of closing the accounts exceeds 7,000 million Kwanzas (approximately US$ 70 million), is required to prepare and to submit a transfer pricing file to the Angolan Tax Authorities.

With respect to the economic analysis of the transactions, this new regime only foresees the application of the following methods: (i) Comparable Uncontrolled Price Method (CUP), b) Resale Minus Method and c) Cost Plus Method.

Regime applicable to invoices and similar documents

Presidential Decree No. 149/13 provides that the issuance of invoices or equivalent documents is mandatory whenever a sale of goods or a supply of services occurs in Angola.

This legislation establishes the requirements to be fulfilled by taxpayers when issuing, keeping or archiving any invoice or equivalent document and sets forth the concept of invoice and of an equivalent document. Moreover, it also establishes the exceptions to the general rules as well as applicable penalties.

These new rules will enter into force 60 days after the date of its publication.

For additional information with respect to this Alert, please contact the following:

Ernst & Young Angola, Limitada, Luanda
  • Luís Marques
    +244 227 280 461
  • Alexandre Fernandes
    +244 222 371 390
Ernst & Young, S.A., Lisbon, Angolan Tax Desk
  • António Neves
    +351 217 912 295

EYG no. CM3877