Tax Residency in Angola
1. Criteria for Determining Tax Residency in Angola
According to Article 10 of the Angolan Income Tax Code (ITC), an individual is considered a tax resident in Angola if they meet any of the following criteria:
- Physical presence in Angola for more than 183 days in a calendar year.
- Having a permanent home in Angola.
- Exercising a professional activity in Angola.
- Having economic interests in Angola.
For legal entities, tax residency is determined based on their place of incorporation or effective management.
2. Impact of International Tax Treaties on Tax Residency Criteria
Angola has entered into several double taxation agreements (DTAs) with other countries. These DTAs may modify or provide exceptions to the standard criteria for tax residency as defined in domestic law.
Key Provisions in DTAs Relating to Tax Residency
DTAs typically include provisions that define the term "resident" for the purposes of the treaty. These provisions may differ from the definition of residency under domestic law.
For example, the DTA between Angola and Portugal defines a resident as an individual who is liable to tax in Angola by reason of their domicile, residence, place of management, or any other criterion of a similar nature.
Modifications and Exceptions Introduced by DTAs
DTAs may introduce modifications or exceptions to the standard criteria for tax residency to prevent double taxation and promote cross-border economic activities.
For instance, the DTA between Angola and South Africa provides a tie-breaker rule for individuals who are considered residents of both countries under their respective domestic laws. The tie-breaker rule states that an individual will be considered a resident of the country where they have a permanent home.
Rationale for Treaty-Specific Modifications
Treaty-specific modifications to tax residency criteria aim to provide clarity and prevent double taxation by establishing clear rules for determining tax residency in cases involving cross-border activities. They reflect the mutual agreement between Angola and the other treaty partner to facilitate tax compliance and enhance economic cooperation.
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