Angola | Proposed New Personal Income Tax Code Postponed

Angola | Proposed New Personal Income Tax Code Postponed

On 1 April 2025, the Angolan General Tax Administration (AGT) announced a proposal for the new Personal Income Tax Code (IRPS), aimed at modernising the national tax system. This initiative seeks to replace the existing taxation framework, which relies on multiple legislative instruments, including the Income Tax Code (CIRT), the Capital Investment Tax Code (CIAC), the Stamp Duty Code (CIS), and the income component of Property Tax, with a single tax code that covers all income.

 Following public consultation, the General Tax Administration (AGT) has confirmed that the implementation of the new Tax Code has been postponed to 1 January 2027, with mandatory reporting of income commencing in January 2028. The 2027 tax year will serve as a transition period, allowing taxpayers to familiarise themselves with the new system and understand its impact on their income and tax obligations before it becomes compulsory in 2028.

 Key proposed changes affecting payroll:

New Categories of Income

IRPS introduces five income categories

  • Category A: Income from dependent employment
  • Category B:  business and professional income  
  • Category C: capital income
  • Category D: Property income
  • Category E: Asset increases

Income from dependent employment continues to be classified under Category A, as in the previous Tax Code.

 Tax Residency

A tax model based on worldwide income will be adopted for tax residents and source income for non-residents.

 Category A – Dependent Employment Income

The definition of remuneration has been expanded to specify taxable items.

A new provision has been introduced regarding bonuses from third parties. If a worker receives a bonus related to their work from an entity other than their employer, this income is taxable and is subject to a 10% withholding tax.

 Allowance Exemptions

  • Food allowance: The exempt amount will increase from Kz. 30,000 to Kz 43,000 per month.
  • Transport allowance: The exempt amount will increase from Kz. 30,000 to Kz 43,000 per month.

New exemptions in Category A

  • Persons with disabilities: Individuals with a legally recognised incapacity of 50% or more, supported by official documentation and approved by the Tax Administration.
  • War-disabled persons: Individuals with a legally recognised incapacity of 50% or more, registered with the relevant supervisory ministry.
  • Foreign diplomatic or consular agents: Income is exempt if reciprocity exists between countries.
  • Foreign non-governmental organisation (NGO) staff: Income is exempt under agreements with national authorities, subject to approval by the Tax Administration.

Benefits in Kind

Taxable value rules have been clarified as follows:

  • Housing: Taxable income equals payments made by the employer. If rent is not paid, taxable income equals the market rental value.
  • Loans from employer: For interest-free or reduced-interest loans, taxable income is the difference between the reference interest rate (set by the National Bank of Angola) and the actual interest paid.
  • Use of company vehicle: Taxable income equals 0.5% of the acquisition or production cost per month of use.
  • Purchase of company vehicle: Taxable income is the positive difference between the purchase price and the value already taxed during prior use.
  • Other benefits: Valued at acquisition cost; if unavailable, market value is used.

Income Tax Rates

No changes have been proposed to the current income tax rates.

 Withholding and Reporting Obligations

  • Monthly payments: Tax withheld by entities paying Category A income must be submitted by the last day of the month.
  • Annual reporting: Entities must submit the Declaração Anual Modelo 2 by 15 March for income and withholdings. Previously, employers were not required to file an annual tax report. The General Tax Administration (AGT) system automatically generated the annual declarations using data from monthly remuneration and withholding statements. Employers were only required to review and confirm their information in the annual Modelo 2 declaration through the taxpayer portal.

Self-Assessment and Deductions

Individuals can deduct health, medical, and educational expenses incurred for themselves and dependents during the tax year.

 Annual Income Tax Return Requirements

  • Individuals earning only Category A income from one employer are exempt from submitting an annual return.
  • Individuals earning Category A income from multiple employers are required to submit an annual income tax return.

These changes are currently at the proposal stage. Official enactment will occur through publication in the Official Gazette, and further communication will be provided once the documentation becomes available.

 Please refer to the links below for further information:

AGT Notice 1 April 2025

AGT Notice 17 July 2025

Proposed Personal Income Tax Code (pdf)