NEWS
Angola - Alterações nas regras relativas a Operações Cambiais por Pessoas Singulares
Bank of Angola forces foreign employees to open bank account
Published in furtherafrica.com
The Angolan National Bank (“BNA”) published the Notice no. 17/20, of August 3rd, approving new rules and procedures for carrying out foreign exchange transactions, applicable to individuals.
Among other amendments, BNA forces foreign employees working in the country to open a bank account in a banking financial institution based in Angola, in which the foreign employees must receive their work incomes earned in the country.
Notwithstanding, foreign employees may buy foreign currency and transfer abroad their work income legally earned under an employment agreement in Angola, at any time, provided that the frequency of said transfers is superior to the work incomes’ earning frequency.
The Angolan banking financial institutions must verify several requirements prior to the approval of the purchase of foreign currency, namely, the validity of the work visa, the existence of a valid employment agreement, that the incomes were transferred by the employers and tax compliance of the foreign employees.
This Notice will enter into force on the 2nd of September, 30 days after its publication.
Article by Marco Correia Gadanha
Marco Correia Gadanha is a partner of the Portuguese law office MC&A. He is specialized in legal advice to international transactions. Marco has extensive experience of legal practice in Portugal and in the Portuguese-speaking African countries. Since 2008, he has practiced mainly in the areas of labor and litigation, assisting national and international clients in these and other matters, namely corporate law, especially in Portugal, Angola and Mozambique. He graduated at the University of Coimbra in 2005 and he holds post-graduations in Labor and Angolan Law.
Portugal establishes new tax measures to assist micro, small and mediumsized Companies
Angola amends industrial and personal income tax codes
Published in furtherafrica.com
On July 20th and 22nd, Law no. 26/20, approving the Industrial Tax Code, and Law no. 28/20, which introduces changes to the Personal Income Tax Code, were published.
The regulations that have been introduced by the mentioned legal diplomas will come into force 30 days after the respective publication. Below we highlight the most relevant changes for the taxable persons approved by the Industrial Tax and Personal Income Tax Codes.
Industrial Tax Code
With the application of these new rules the legislator intends to create a more competitive tax regime, in relation to other African countries, to attract foreign investment and consequently, supporting the development of Angolan economy. The changes to the Industrial Tax Code will come into force on August 19th, 2020, 30 days after its publication. We highlight the following most relevant and impacting provisions:
- General and simplified regime of taxation with respect to Industrial Tax: Two different regimes and respective regulations of incidence and assessment of the correspondent tax were established – therefore the previous A and B Groups are extinguished;
- Foreign Exchange Variations: For the determination of the taxable income, both incurred favorable and unfavorable foreign exchange variations are now considered as Income or Gains and as tax Costs/Expenditures (potential variations are now disregarded);
- Extension of the deadline for deduction of tax losses: The reporting deadline to carry out the tax deduction for tax losses is extended from 3 to 5 years compared to the year in which they were assessed;
- Change of the nominal tax rate of the Industrial Tax: Reduction of the general nominal industrial tax rate from 30% for 25% and subjection to the 35% tax rate for income generated in the scope of banking activities, insurance sector, telecommunications services providers and oil companies, as defined by Presidential Legislative Decree no. 3/12 of March 16th
- Tax neutrality regime: The tax neutrality regime applicable in companies’ merger and demerger operations will be applicable to all Industrial Tax’ taxable persons.
Personal Income Tax Code (PIT)
Law no. 28/30 has introduced changes to the Personal Income Tax Code, which, in general terms, intend to protect families with low income levels, by giving them liquidity necessary to purchase essential goods to their livelihood.
The legal diploma foresees that changes introduced by the Personal Income Tax Code would come into force on August 21st, 2020, “30 days after its publication”. Considering the different understandings that the tax framework applicable to salaries to be paid in August, Angolan Tax Authorities (AGT) have issued a Ruling (“Comunicado”) according with the new rules are applicable to income to be paid from 1st of September 2020.
- Tax incidence – A Group: The income originated by dependent work above AKz 70,000 is subject to PIT (previously, the minimum limit was AKz 35,000 which corresponds to half of this new minimum limit).
- Different salary components are subject to tax: The amounts paid by way of compensation for the termination of an employment contract, allowances for failure and housing allowances are subject to the PIT (the global amount of the allowance is subject to PIT). To determine the applicable rate, all the amounts of all allowances are added.
- Changes to the PIT rates: PIT is now calculated by application of progressive tax rates, ranging between 10% and 25%, according to the income level. Employers are required to adjust their payroll software/ programs reflecting the rates listed in the Tax Rates Table annexed to the PIT Code.
- Withholding tax for payments of income of B and C Groups: The withholding tax rate applicable to the income payments of B and C Groups will be 6.5%.
- Acquisition of services from non-resident entities: The acquisition of services from non-resident entities (accidental services) is now subject to PIT at a 15% rate.
- Deadline for payment of tax and submission of tax statements: The deadline for payment of tax and submission of some tax obligations will be the last working day of the following month of the respective taxable event.
Article by Duarte Marques da Cruz
Duarte Marques da Cruz is partner of the Portuguese law firm MC&A, specialized in international business advisory, with a special focus in Lusophone markets. With extensive experience in the Energy sector (Renewables and Oil & Gas) and in International Taxation, he has supported international companies in major upstream, midstream transactions and projects, including in implementing, exploration and development programs. Duarte has also supported international clients in other areas of practice, namely, Mining, Transport & Logistics, Regulatory Compliance and Mergers & Acquisitions in Mozambique, Angola and Portugal.
Angola: Investing in Economic Exclusive Zones
Published in furtherafrica.com
Since its creation, the Luanda-Bengo Economic Exclusive Zone (EEZ) has been a factor encouraging investment, not only in the region but also in the Angolan economy.
Its economic evolution has been felt over the last few years, in the flourishing of several innovative projects within this project, much due to the commitment and promotion that the Government has made. One of the paradigmatic examples of this commitment is the privatization plan that has been carried out over the last few months, in order to allow for greater competitiveness in the EEZ and an increase in the investment of national and foreign investors in businesses in order to create wealth and increase national productivity.
In addition to diversifying the economy, the EEZ aims to develop business clusters, create jobs and increase exports.
For that purpose, the Government has defined a set of benefits that make the EEZ especially appealing to national and foreign investors who want to invest, either in brownfield investments or in greenfield investment.
The range of benefits granted to investors includes simplified administrative and customs procedures, special labor and migration regimes and special tax and customs benefits. Some examples of benefits may be the possibility of prior customs clearance, the possibility of continuous operation without special administrative license and exemption from customs duties.
Therefore, the Luanda-Bengo EEZ has focused as a cornerstone of the effort for the growth of the Angolan economy, guaranteeing potential investors unique conditions for their investments.
Article by Marco Correia Gadanha
Marco Correia Gadanha is a partner of the Portuguese law office MC&A. He is specialized in legal advice to international transactions. Marco has extensive experience of legal practice in Portugal and in the Portuguese-speaking African countries. Since 2008, he has practiced mainly in the areas of labor and litigation, assisting national and international clients in these and other matters, namely corporate law, especially in Portugal, Angola and Mozambique. He graduated at the University of Coimbra in 2005 and he holds post-graduations in Labor and Angolan Law.
Investing in Mozambique – Special Economic Zones and Industrial Free Zones
Published in furtherafrica.com
Special Economic Zones (SEZ) and Industrial Free-Trade Zones (IFZ) are not new in Mozambique.
However, its potential and growth capacity has been overlooked and unexploited by several foreign investors setting-up their businesses in the country, many times for lack of knowledge of their existence, geographic proximity and perks (v.g., tax and customs benefits).
From north to south, SEZ and IFZ are spread across the vast Mozambican coastline. In Nampula province, more than US$ 2.5 billion has been invested, since 2009, in the SEZ of Nacala and the IFZ of Lucone and Minhuene.
In Zambezia province, the SEZ and IFZ of Mocuba are home to the first solar power plant in Mozambican, with 40 MWs of power capacity. In Sofala, the SEZ of Beira (Manga-Mungassa) accommodates investment plans of the Chinese company Dingsheng International Investment close to US$ 500 million. In Maputo, the SEZ and IFZ of Beluluane Industrial Park, Mozambique’s largest SEZ, hosts the largest Mozambican company, Mozal S.A.R.L.
Tax Benefits
In general, companies based in SEZ benefit from a corporate income tax exemption in the first 3 tax years of operation, from a 50% reduction in the corporate income tax rate from the 4th to the 10th tax year, and from a 25% reduction from the 10th to the 15th tax year.
On the other hand, companies and developers based in IFZ benefit from a corporate income tax exemption in the first 10 tax years of operation, from a 50% reduction in the corporate income tax rate from the 11th to the 15th tax year, and from a 25% reduction for the remaining life of the project.
Customs Benefits
Companies based in SEZ and IFZ are exempt from customs duties on imports of construction materials, machinery, equipment, accessories, spare parts and other goods essential to the pursuit of the licensed activity. This exemption is extended to Value-Added Tax (VAT), including VAT over acquisitions on the internal market, as well as inside of SEZ.
Imports of goods for SEZ and IFZ are also exempt of customs tariffs and other customs impositions. Such goods can also be exempt of the pre-shipment inspection.
Transfers of goods and services within the SEZ and IFZ, are equally exempt of VAT, as long as they remain within SEZ and IFZ.
Transfers of goods and services from SEZ and IFZ to the internal market are deemed as imports, being subject to the payment of customs tariffs rights and applicable taxes.
The exit of goods from SEZ or IFZ to external markets is not subject to the customs tariffs and impositions, if directly exported in accordance with customs transit regulations.
Other Benefits
The industrial waste intended to be treated as waste by municipal authorities may leave the SEZ or IFZ without legal bureaucracies.
Furthermore, companies based in SEZ and IFZ may benefit from lenient legal frameworks applicable to its operations, liabilities and public inspections
Article by Duarte Marques da Cruz
Duarte Marques da Cruz is partner of the Portuguese law firm MC&A, specialized in international business advisory, with a special focus in Lusophone markets. With extensive experience in the Energy sector (Renewables and Oil & Gas) and in International Taxation, he has supported international companies in major upstream, midstream transactions and projects, including in implementing, exploration and development programs. Duarte has also supported international clients in other areas of practice, namely, Mining, Transport & Logistics, Regulatory Compliance and Mergers & Acquisitions in Mozambique, Angola and Portugal.