The Law nº 7/19, of April 24, has approved the new Code for the Value Added Tax (“VAT”).
The Approval of the VAT Code has been developed upon the current tax reform the country is facing. As stated in this document, the aim is to adopt a tax without a downfall effect, characterized as being appropriate to local conditions and at the same time simple and modern, being able to deal with the globalized economy.
VAT Code covers, on a large scale, onerous transmission of goods, costly services and imports. The VAT rate established is of 14%.
The new VAT Code shall enter into force on the 1st of July of 2019 and its provisions are expected to apply on a compulsory basis, on this said date, not only to taxable persons registered in the Tax Office of Large Taxpayers, but also to the importation of goods.
For the taxpayers registered in other tax offices, the VAT Code´s provisions apply from the January 1 2021. However, taxpayers may choose to adhere to the provisions from the 1st of July of 2019 upon verification of the following requirements:
- To have an organized account and updated register within the system of the General Register of Contributors;
- Not have a tax debt;
- Have adequate means for the issuance of invoices or equivalent documents through data processing systems;
- Have adequate means for the submission, through electronic data transmission, the tax returns to which they are subject, as well as the invoicing and accounting elements.
The law also foresees a transitional regime. Without prejudice to opting for the general tax regime, taxable individuals shall be subject to a simplified taxation in 2019 and 2020, provided that they have achieved a turnover or import transaction in Kwanzas in the preceding year equivalent to USD 250,000.
Those taxable individuals who don`t choose to join the general VAT system, pay the tax quaterly in April, July, October and January. The tax is calculated by applying half of the VAT rate on turnover for the previous three months, with the right to deduct up to the limit of 4% of the tax paid on its purchase of goods and services.
The VAT`s taxpayers must submit by electronic transmission of data, amongst other duties, the declaration of commencement of activity within 60 days after the entry into force of Law nº. 7/19.
Taxable individuals covered by the general scheme and the transitional arrangements shall be exempt from Stamp Duty on the issuing of discharge receipts.
The current Consumer Tax Code (“IC”) and Verba 15 of the Stamp Tax Code table are hereby revoked.