Worldwide transfer pricing reference guide 2014

Angola
Taxing authority and tax law
Taxing authority: Angola Ministry of Finance/National Directorate of Taxes.
Tax law: For the first time in Angola, qualifying taxpayers will have to document their transfer pricing policy with respect to 2013
transactions. Angola’s new transfer pricing documentation rules are included in Presidential Decree 147/13 of 1 October 2013
(Statute of Large Taxpayers).
Given the status of the ongoing tax reform in Angola, any new legislation may be subject to administrative clarification at any point
which may change the information provided in this report.
Relevant regulations and rulings
The Angolan law requires that all documents submitted to the tax authorities must be written or translated into the Portuguese
language.
The Angolan Transfer Pricing Regime applies to taxpayers, who are listed or generally included in the list as Big Taxpayers and have a
turnover in excess of AOA7 billion (approximately US$70 million). Ruling 472/14 of 28 February 2014 issued by Ministry of Finance has
published the list of Big Taxpayers.
Both Article 55 of the Industrial Code (which establishes the general framework for application of the arm’s length principle) and
Article 11 of the Statute of Large Taxpayers clearly define all cases of legal and juridical dependency that will create related parties for
transfer pricing purposes.
In this regard, concept of special relations is as follows:
• When the directors or managers of a company, as well as their spouses, ascendants and descendants, directly or indirectly have an
ownership interest of 10% or more in the capital or the voting rights of the other entity
• When majority of the members of the board of directors or management are either common or distinct but related by marriage,
non-marital partnership or direct kinship
• When one of the entities has contractual control over the other
• When the companies have a relationship of control or cross-ownership or contractual subordination contract, peer group or equivalent
situation following the terms of Company Law
• When commercial relations between the two entities represent more than 80% of the volume of operations
• When one finances the other, to the extent of more than 80% of its credit needs
OECD guidelines treatment
As Angola is not an OECD member, the OECD Guidelines have not been adopted. It is uncertain whether the OECD Guidelines will be
adopted or followed in practice at a later date.
The arm’s length principle applies to all related party transactions.
The Masterfile concept established in the European Union Code of Conduct on transfer pricing documentation for associated enterprises
is not adopted by the Angolan legislation.
Priorities/pricing methods
The new Angolan transfer pricing legislation, applicable for “large taxpayers,” only foresees the application of the traditional
transactional transfer pricing methods, namely the CUP method, Resale Price method and Cost Plus method.
Transfer pricing penalties
The most important implication of the rules is the placing of the burden of proof of the arm’s length nature of pricing on the
taxpayer — which may imply that the tax authorities will seek to adjust the prices and conditions applied in a related party transaction
based on the available evidence, without any reference to the taxpayer’s position.
Worldwide transfer pricing reference guide
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