Angola is living uncertain times, with the prospect of the creation of a special tax on international capital transfers. Nothing is yet decided, nevertheless such tax may apply to all exchange transactions abroad, with the possible exclusion of transfers meant to pay merchandise imports, or services rendered by foreign entities to Angolan companies and citizens. Transfers or wages, for example, would gain an additional cost.
In 1997 the Foreign Exchange Law amended in 2001 in consequence of the reorganization of the financial system, updated principles and standards in order to adapt the operation of Financial Institutions to the current stage of economic development. This Act established a basic legal framework, and a regulation for foreign exchange trade taking into account the legitimate interests of the State, as well as the other economic entities.
The new Capital Application Tax Code, hereafter referred to as “CATC”, published last October the 20th 2014 and entered into force at the 20th of November 2014, it comes as a part of a deep and broadening tax reform been undertaken in Angola. It has a clear purpose to modernize the Angolan tax system as well as another goal which is the incentive of the launch of Angolan capital markets.
In a more technical aspect, it also aims at clarifying tax rules and broadening the tax base. We point out as the more substantial changes the ones concerning the broadening of income subject to tax and respectively tax rates, rules of tax liquidation procedure and tax infringements.