Angola and Cape Verde signed in August 2019 an Agreement for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income (“DTA”).

The DTA establishes rules for harmonizing the taxation of different types of income obtained in one State by entities resident in the other State. The main withholding tax rates are as follows:

• Dividends: 5% (upon compliance with certain requirements) / 10% (general rule);
• Interest: 8%;
• Royalties: 7.5%;
• Technical service fees: 5%.

The DTA has also an impact on the concept of permanent establishment and provides for anti-abuse rules and new mechanisms for the exchange of information between the contracting States.

The DTA was approved for ratification in Cape Verde in March 2021, but is yet to be approved by the National Assembly in Angola.

The entry into force of the DTA is dependent on the fulfillment of all the procedures and formalities of the domestic law of each State, including by Angola.