Tax: the main points of Circular 004 on the 2024 State Budget in Angola

On January 1, 2024, Law No. 15/23 of December 29, 2023, approving the General State Budget (GSB 2024), came into effect. This law introduced various tax measures, and given that some were newly incorporated into the Angolan legal system, the General Tax Administration published Circular No. 004 GACA/GJ/AGT/2024 on January 23. The purpose of this circular is to clarify the primary fiscal measures introduced by the GSB 2024 for the 2024 fiscal year. Let's briefly highlight the main points brought by the Circular on the Tax Measures Introduced by the GSB 2024:

I. Creation of the Special Contribution on Foreign Exchange Operations (CEOFC)

CEOFC is established, applicable to transfers abroad under service contracts, technical assistance, consultancy, management, capital operations, and unilateral operations.

Excluded from CEOFC are payments for health and education expenses if made directly to the bank accounts of health and educational institutions.

Individuals or companies domiciled or headquartered in the national territory requesting fund transfers subject to the contribution are subject to CEOFC.

CEOFC exemptions include the State, its organs, establishments, and entities, as well as diamond and petroleum investment companies.

CEOFC rates are 10% for legal entities and 2.5% for individuals, applied to the transfer amount.

Regarding settlement and payment, the economic burden of CEOFC lies with the individual or entity initiating the transfer; Financial Institutions must ensure settlement and delivery to the State, subject to penalties as per the General Tax Code.

II. Increase of the Income Tax Exemption Threshold for Labor Income from Kz 70,000.00 to Kz 100,000.00

Labor income up to Kz 100,000.00 is exempt from Income Tax.

III. Accounting Update for Fair Value of Fixed Assets without Tax Implication

Changes in equity and latent gains or losses resulting from updating fixed assets (tangible, intangible, and real estate investments) to fair value are fiscally neutral for the 2023 fiscal year, not contributing to the taxable amount for the 2024 Corporate Income Tax.

Costs related to depreciation of revalued assets are not fiscally accepted.

The application of these rules depends on compliance with accounting standards, including the segregation of revaluation operations in the accounting.

IV. Electronic Submission of Income Tax Declarations

In the 2024 fiscal year, taxpayers subject to Corporate Income Tax in the general and simplified regimes are required to submit their tax declarations electronically, prohibiting the submission of physical declarations.

V. Tax Incentives for the Agricultural and Livestock Sector

Costs incurred by taxpayers in the agricultural or livestock sector for investments in necessary infrastructure for production and product distribution are depreciable over a period of 5 years, subject to approval by the General Tax Administration.

VI. Regularized Tax Situation

Taxpayers failing to fulfill any obligations under tax laws, such as declarative obligations, cadastre updates, non-payment of taxes, and other tax obligations, are considered to have an irregular tax situation.

VII. Exceptional Cadastre Regularization

Individual taxpayers registered for over 5 years and inactive during the same period can regularize their registrations without fines and interest by sending a letter to the Tax Office of Domicile, requesting the respective cadastre regularization.