Angola – Tax Authorities’ instruction on donation and destruction of goods and stock losses

In brief

On 30 June 2021, the Angolan General Tax Administration (AGT) issued an instruction with rules aimed at improving and standardising the procedures to be adopted by tax offices and similar local services in monitoring the donation or destruction of damaged goods and stock losses.

In detail

On 30 June 2021, the Angolan General Tax Administration (AGT) issued an instruction with rules aimed at improving and standardising the procedures to be adopted by tax offices and similar local services in monitoring the donation or destruction of damaged goods and stock losses.

The instruction details, among other, the following procedures:

Donation or destruction of goods

The acceptance of the tax deductibility of costs for Corporate Income Tax (“Imposto Industrial” or “II) purposes and to rebut the presumption of a transfer of goods for Value Added Tax (VAT) purposes, of donations or destruction of goods is subject, among other, to the following conditions:

• The taxpayer should:
  
  • File a request addressed to the AGT at least five days in advance. This period may be of one day on the grounds of public health, safety and hygiene reasons;
  • Provide an inventory of the goods or raw materials concerned, mentioning the of expiry date, the acquisition date, quantities, price per unit and other costs incurred until the goods are placed in storage;
  • Present a document issued by a public entity certifying the condition of the goods; 
• The AGT should obtain a report validating the procedure.
• The donation or destruction process must be accompanied by AGT’s technicians. Lack of attendance of said technicians shall not affect the tax deductibility of the costs concerned or give rise to a regularisation of VAT, provided that the taxpayer captures the destruction on video or by photographic means.
• In the case of donations of food products related to expiration date, prior authorisation must be obtained upon request. This should detail the products concerned as well as the beneficiary entities. In addition, the taxpayer must issue delivery and receipt documents as well as obtain monthly proof of delivery of goods. Other donations of products are subject to the requirements foreseen in the Patronage Law.

Stock losses

Stock losses are tax deductible for CIT purposes, and there is a rebut of the presumption of sale for VAT purposes in the following cases:

• Related with expiration dates or mishandling of product by customers, capped at the acquisition value of the goods;
• Arising from theft or robbery (i) upon six months after the date of respective communication; (ii) provided that there is no evidence of a potential recovery of the goods and (iii) if the taxpayer has adopted control procedures, such as video surveillance systems, surveillance by employees at the entrances and exits of the premises, cashier checks and installation of irregular exit sensors in high value products, among other;
• Arising from fires or natural catastrophes, provided that they are supported by a report issued by the Civil Protection and Fire Services.

The deductibility of the above losses is also subject to the adoption by the taxpayer of adequate means of conservation and packaging of the goods, record of losses and evidence that such losses have not been compensated by an insurance company.

This instruction is of immediate application.

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