Analysis: Angola Double Tax Treaties, a Gateway for Investment and for Africa


by António Pedro Pereira* (Antó 


The enacting of a Double Tax Treaty may trigger investment from non-resident entities in a particular country, establishing rules that allow the investor to understand the possible tax framework of a particular investment, taking into consideration the partition of the power of taxation among the contracting states.

A single example is important to understand the concept. In most of the tax jurisdictions the payment of dividends which reflects the ultimate remuneration of an investor is subject to taxation by the country of residence of the investment by means of withholding at the source. This means that an investor knows that for each 100 units of dividends a portion of this dividend may be withheld at the level of the location of the investment, normally by means of a withholding tax mechanism applied by the payee of such dividend, which acts as a tax substitute.

The tax rate may change in accordance with the singularity of the specific tax system. Let´s assume an example with adherence to the current reality. The rule for taxation of dividends as per the Angolan tax rules is 10%. However, as per the Double Tax Treaty with Portugal, it may be possible to reduce the withholding tax for 8%. This means that an investor located in Portugal may benefit from the Treaty Rules and reduce the power of taxation at the location of the investment. This is also true for those cases where an Angolan investor sets up a company in Portugal.

This straightforward example gives us the notion of the importance of a Double Tax Treaty once it helps foreign companies to have a clear and, in most of the cases, a better tax framework once it reduces the rates of withholding at the level of the state in which the investment is located.

At this stage, there is a Double Tax Treaty in force between Portugal and Angola. In what regards the Treaty between Angola and the United Arab Emirates it seems that it may be valid at January 1, 2021. However, there are technical discussions around this framework that will be dealt in another forum.

The advantages of a Double Tax Treaty in the particular case of Angola takes special importance once the country is included in the Pan-African free trade zone that intends the reduction and elimination of tariffs for goods produced in Africa.

These factors may increase the importance of investing in Angola, as well as the need of setting up other tax treaties with countries that are relevant investors in country. There is a huge potential for investing in Angola in several sectors besides the traditional Oil and Gas. Furthermore, the access to other African markets should also be evaluated as part of the business case for Angola.

Finally, by reducing the Corporate Income Tax rate from 30% to 25%, Angola has given the first step to attract investors, without taking into consideration the possibility of tax incentives for investment.

There are now open gates to investment at the level of the existent Double Tax Treaties, we hope that other countries will follow this example. The path for Angola and for Africa is open, it is time to cross over.


* Head of the Angolan Tax practice of EY, working in the Angolan jurisdiction since 2012, with extensive tax experience serving multinational companies on issues regarding taxation rules applicable in Portugal, Angola and Cabo Verde

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