Law No. 28/20 of 22 July was published in the Official Gazette which amends the Personal Income Tax (“PIT”) approved by Law No. 18/14 of 22 October and revokes Law No. 9/19 of 24 April and Law No. 28/19 of 25 September. The amendments produced by Law 28/20 entered into force 30 days after its publication, that is, on 21 August 2020.
The main changes made to the PIT Code are as follows:
- Extension of the PIT base to include all rights/benefits received by employees or service providers which represent an economic advantage, except profits distributed to the partners of purely civil companies, with or without commercial form;
- Taxation of end-of-career bonuses due under the legal-labour relationship, fault allowances, compensation paid to employees for termination of contract, house allowances (total amount) and holiday and Christmas allowances;
- Application of a new rate table to Group A income (income derived by employees, civil servants, and holders of corporate bodies), whereby income up to Kz 70 000.00 is exempt (previously, up to Kz 35 000.00). Income from Kz 70 001.00 onwards will be subject to rates ranging from 10% to 25% (previously from 7% to 17%) and to fixed portions which have also increased in relation to the values of the previous table;
- Application of a 6.5% withholding tax rate to fees charged for the provision of services by Group B and C taxpayers, i.e. self-employed persons and individuals that carry out an industrial or commercial activity, respectively, when paid by entities with organized accounting or simplified accounting model;
- Application of the 25% rate to the Group B and C tax base when income is not subject to withholding tax;
- Increase of the withholding tax rate from 6.5% to 15% applicable to fees arising from services provided by non-resident entities;
- Obligation to withhold tax at a rate of 2% or 6.5% on the purchase of goods or services, respectively, when taxpayers take the place of their suppliers or service providers when issuing invoices under the self-billing scheme;
- Extension of the list of professions whose income will fall under Group B taxation.
Luanda, 28 July, 2020
António Vicente Marques - Sociedade de Advogados, RL