The General State Budget for 2023 was enacted by means of Law No. 2/23, of 13 March 2023 (“State Budget Law”), which entered into force on the same day. In general terms, the State Budget Law maintains the tax provisions introduced by the 2022 State Budget, but it also contains important new features, notably in respect of Personal Income Tax and Customs Duties. The main tax and customs measures applicable in 2023 are as follows:

1 - Personal Income Tax

• A Personal Income Tax rate of 6.5 % is established as applying over the taxable income, corresponding to the volume of sales of goods and services not subject to withholding tax of Group C taxpayers whose turnover has been equal to or lower than Kz 10,000,000.00 (ten million kwanzas) in the 2022 financial year.
• Group C taxpayers with organized accounting records shall be subject to the rules on the computation of taxable income applying to taxpayers subject to the general Industrial Tax regime, with the required adjustments.
• The rule that determines that the taxable income of Group C taxpayers will correspond to the volume of sales of goods and services not subject to withholding tax, when the turnover volume is four times higher than the maximum value corresponding to their activity in the Minimum Profit Table, is suspended.

2 - Value Added Tax (“VAT”)

• The reduced 7% VAT tax rate is maintained for the supply of hotel and restaurant services, provided that certain conditions are met.
• VAT exemption on the importation of goods intended for donation for philanthropic purposes or to mitigate the effects of natural disasters, if recognized by the Tax Authorities, is maintained.

3 - Stamp Duty on receipts

• The obligation to pay 7% Stamp Duty on receipts imposed on certain VAT taxpayers does not apply to international air transport services for passengers nor to the renting of real estate, which remain subject to the rate defined in the Stamp Duty Code.

4 - Special Gaming Tax

• The Special Gaming Tax rates are amended, with different rates being applied depending on the type of games, and an exemption is provided for prizes across all types of games of a value equal to or lower than Kz 200,000.

5 - Customs Provisions

• The possibility of clearance of goods with deferred payment of duties and other customs charges on the importation of goods by public institutions is suspended.
• The exemption from customs duties on the importation of goods imported by public institutions or public companies for investment or public works is suspended.
• The 70% customs duties rate applicable on the export of nationalized goods of foodstuffs, medicines, medical equipment, and biosecurity goods is maintained.
• The values established for determining the procedures for the clearance and subjection to customs charges of goods and personal effects are maintained.
• The exemption from customs charges on the import of goods intended to mitigate, prevent and contain the spread of the effects of natural and non-natural disasters is maintained.
• The granting of various benefits of a customs nature to Authorized Economic Operators is provided for.

6 - Several measures implemented in the 2022 State Budget are maintained, notably: 

(i) VAT rate of 14% applicable to the business of games of chance and social entertainment; (ii) simplified VAT regime for taxpayers with an annual turnover or importation operations of a value comprised between Kz 10,000,000 and Kz 350,000,000 – subject to a monthly VAT rate of 7% on income effectively received from non-exempt transactions; (iii) Subjection to  7% Stamp Duty due on receipts by VAT taxpayers carrying out certain transactions exempt from VAT; and (iv) maintenance of the rates applying to both Inheritance and Movable Property Donation Tax and to Motor Vehicle Tax (vessels and aircrafts).

For more information on this Tax Alert please contact:
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