Following the approval of the Double Tax Treaty signed between the Republic of Angola and the Government of the United Arab Emirates (“DTT”) and its ratification, the Tax Authorities (“AGT”) informs that said DTT is effective in Angola as of January 1, 2021.
Main provisions of the DTT:
- Reduced withholding tax rates
- Dividends - 8% rate on the gross amount;
- Interest - 8% rate on the gross amount. However, the Source State will exempt interest when it respects interest from long-term loans (five years or more) granted by a bank or financial institution resident in the other Contracting State, amongst others;
- Royalties - 8% rate on the gross amount;Technical services - 5% rate (includes technical, management and consultancy services).
- Permanent establishment (PE) - PE is triggered in a Contracting State when activities are carried out for more than six months in offshore drilling sites or drilling rigs and ships used for the exploration, extraction and production of natural resources.
- Oil exploration/production - income resulting from the oil exploration/production is excluded from the scope of the DTT.
- Operation of ships or aircraft in international traffic - income deriving from maritime and air transport activities is liable to tax in the Contracting State in which the effective management of the company is located.
- Tax sparing clause - according to this clause residents of Angola and the United Arab Emirates may deduct the tax that would have been paid in the other state, but that was not, due to a tax exemption or reduction granted.
Luanda, 22 June, 2020
António Vicente Marques - Sociedade de Advogados, RL