All tax residents in Angolan territory will be subject to IRPS, according to the legislative proposal of the General Tax Administration (AGT), which should come into force from 2026 and which aims to build a "fairer, simpler and more modern" tax system.
IRPS is levied on income, in cash or in kind, "even if it comes from illegal acts", regardless of where it is obtained, the currency and the form in which it is earned, according to the proposal that is under public consultation until next June.
For IRPS purposes, taxpayers who, in the year to which the income refers, have remained in Angola for more than 90 days, consecutive or interpolated, in any period of 12 months starting or ending in the year in question, are considered to be resident in Angolan territory, the document reads.
Speaking to Lusa, Milton Melo, Partner & Head of Tax at Ernst Young (EY) Angola, highlighted that the IRPS encompasses several taxes that, as of today, are paid separately and that should, in light of this proposal, be paid under a single code.
According to the EY taxation specialist, in relation to the taxation of income of tax residents (whether they are foreign or Angolan citizens), the model is not very different from what is already done in other countries.
"For example, a Portuguese person who is a tax resident in Portugal is taxed on income obtained in Portugal and abroad. One of the major differences compared to what is projected for Angola could be the mechanisms to avoid double taxation."
"Any Angolan or foreign person who remains in Angola for more than 90 days, within a 12-month period, may be considered a tax resident in Angola. This means that the person, by being a tax resident in Angola, is not only taxed on the income they earn in Angola, but also outside Angola", he explained.
However, tax residents in Angola who hold income obtained abroad may trigger a mechanism to avoid double taxation, but only when Angola has entered into a convention to eliminate double taxation with the country from which the income originates.
"If an Angolan works abroad and does not spend 90 days in Angola in a 12-month period, he will not be a tax resident and, consequently, will not have to declare income earned outside Angola," he pointed out.
"Now, an Angolan who works abroad but spends more than 90 days in Angola in a given 12-month period, has to declare the income earned in Angola and abroad," he further explained.
Nationality "is not relevant for the purposes of determining an individual's tax residency," he noted.
The EY expert argued that an extension of the 90-day rule to more than 183 days should be considered, considering that, with the proposed rule (90 days), a citizen can be a tax resident in more than one country, while a longer period, in his view, minimizes this risk.
The legal diploma defines the taxation model in income categories, namely, income from dependent work, business and professional income, capital income, property income and asset increases.
According to the proposal, if the taxpayer (person required to pay the tax) is resident in Angolan territory, IRPS is levied on all of his/her income, including that obtained outside that territory.
