Draft State Budget Law for 2024

The State Budget law proposal for 2024 has been recently submitted to the National Assembly.

The following proposed amendments should be highlighted:

Revaluation of fixed assets at fair value

The State Budget proposal provides for a new regime allowing the revaluation of fixed assets at fair value. According to said regime, equity variations and potential capital gains or losses resulting from the revaluation of fixed assets to their fair value (tangible and intangible fixed assets and real estate investments) should be tax neutral and should not qualify as income or costs for the purposes of computing the taxable income.

The regime under reference requires the compliance with the applicable accounting standards, including using specific accounts to book the revaluation, under terms still to be determined.

It should be noted the regime should be already applicable to 2023 financial year.

Infrastructure costs incurred by taxpayers in the agricultural and livestock sector

Subject to the prior approval of the Angolan Tax Authorities, costs incurred by taxpayers in the agricultural and livestock sector with investments in infrastructures required for the production and transportation of products, which benefit the communities where they are located should be eligible to be amortized over the 5 financial years subsequent to those in which the investment was made.

Electronic submission of returns

Taxpayers subject to Industrial Tax under the General and Simplified Regimes should be required to submit their tax returns electronically and should not be allowed to submit returns in physical format.

The Special Contribution on Invisible Current Transactions, which is levied on transfers made under foreign technical assistance and management contracts or unilateral operations, should be reintroduced, although with some changes.

The basis of computation of the contribution should be the amount transferred in national currency, regardless of the exchange rate used.

This contribution should be due, at the rate of 10%, over the value of the transfers to be made, being the same subject to withholding by the financial institution upon processing the transfer abroad.

Finally, the Angolan State and any of its bodies (with the exception of public companies and institutes), Oil & Gas operators and mining operators should be exempt from this contribution.

The rules set out in the General Tax Code regarding payment in instalments should be extended to customs’ debts, in the following cases:

• There has been a customs’ clearance procedure for goods imported with deferred payment of duties and other customs’ charges;
• The additional tax assessment results from a post-import audit process.

The following benefits for Authorized Economic Operators engaged in import and export activities should be maintained:

• The ability to pay custom duties in installments, in accordance with the General Tax Code.
• Extension of the deadline for 60 (sixty) days for the submission of the Commitment Declaration for Exclusive Goods imported for the Productive Sector.
• Exemption from providing a guarantee in the customs clearance process.
• The possibility of clearing goods with deferred payment of customs duties and other customs obligations.

For Authorized Economic Operators certified as Official Customs Brokers and Forwarders, the following benefits should also be maintained:

• A reduction in the number of physical and documentary inspections.
• Priority treatment in the event of selection for physical and documentary inspections.
• Exemption from providing a guarantee in transit processes.

An adjustment to the allocation of VAT revenue is planned, with 80% of the revenue now being allocated to the Treasury Account and 20% to the VAT refunds account, instead of the previous 75%/25%.

The proposal does not include any changes to VAT since a set of VAT-related measures has been under discussion since July 2023, with general approval by the National Assembly. These measures are expected to lead to the republication of the VAT Code, according to information publicly avalable.

Amendments have been proposed to the Special Gaming Tax, Inheritance and Donations Tax and Motor Vehicle Tax.

On the other hand, it is also being proposed to amend article no. 176 of the Tax Execution Code by broadening the concept of non-regularized tax situation, so that all taxpayers who fail to comply with any tax obligation, including declarative obligations, are considered to have a non-regularized tax status.

KPMG is fully available to provide any clarification on these matters to our clients.