Harmful Tax Practices – 2017 Peer Review Reports on the Exchange of Information on Tax Rulings

Angola

Angola is taking steps to implement the legal basis for the transparency framework and to commence administrative preparations to ensure that information on rulings will be exchanged in a timely manner. Angola is recommended to finalise its information gathering process to identify all past and future rulings and potential exchange jurisdictions, with a review and supervision mechanism, as soon as possible (ToR I.4). Angola is recommended to continue to put in place a domestic legal framework allowing spontaneous exchange of information on rulings and to continue its efforts to complete the templates for all relevant rulings and to ensure that the exchanges of information on rulings occur as soon as possible (ToR II.5).

Angola can legally issue five types of rulings within the scope of the transparency framework.

In practice, Angola has not identified during the calendar year 2017 (year in review) any past rulings; and for the year in review, Angola issued one future ruling within the scope of the transparency framework.

As no exchanges of information on rulings were conducted, no peer input was received in respect of the exchanges of information on rulings received from Angola.

Introduction

20.  This peer review covers Angola’s implementation of the BEPS Action 5 transparency framework for the year 2017. The report has four parts, each relating to a key part of the ToR. Each part is discussed in turn. A summary of recommendations is included at the end of this report.

A. The information gathering process

21.  Angola can legally issue the five following types of rulings within the scope of the transparency framework: (i) rulings related to preferential regimes; (ii) cross-border unilateral advance pricing agreements (APAs) and any other cross-border unilateral tax rulings (such as an advance tax ruling) covering transfer pricing or the application of transfer pricing principles; (iii) rulings providing a downward adjustment of taxable profits; (iv) permanent establishment rulings; and (v) related party conduit rulings. Certain rulings are issued local by different tax offices around Angola and “binding information requests” are issued by the legal directorate, office of fiscal services, large taxpayers’ directorate and directorate for natural resources of the Administração Geral Tributária (“AGT”). These are the rulings related to the oil, gas and mining sectors. Angola is currently starting a process to request information from all branches and directorates that issue decisions on taxpayer complaints and appeals in order to identify whether other rulings in scope were issued during the year in review. Angola acknowledges that a transfer pricing unit has been recently created and legislation and procedures are being developed.

Past rulings (ToR I.4.1.1, I.4.1.2, I.4.2.1, I.4.2.2)

22.  For Angola, past rulings are any tax rulings within scope that are issued either: (i) on or after 1 January 2015 but before 1 April 2017; or (ii) on or after 1 January 2012 but before 1 January 2015, provided they were still in effect as at 1 January 2015.

23.  AGT has contacted the areas responsible for issuing rulings and have instructed staff to search their files to identify rulings issued as required by the transparency framework. However, AGT acknowledges that it has not recorded the information on the tax rulings issued with the necessary level of detail to meet the standard of the transparency framework.

24.  Angola acknowledges that the necessary information on past rulings is unlikely to be found on the available records. Angola notes that it will seek to apply the “best efforts approach” once all past rulings have been identified.

Future rulings (ToR I.4.1.1, I.4.1.2, I.4.2.1)

25.  For Angola, future rulings are any tax rulings within scope that are issued on or after 1 April 2017.

26.  AGT has read and verified all rulings issued (“binding information requests”). AGT has contacted the areas responsible for issuing rulings and have instructed staff that it is necessary to keep record of details of rulings issued as required by the transparency framework.

27.  Angola affirms it is currently following guidelines covering which rulings fall in the scope of the transparency framework and what information on the rulings should be kept in order to meet the level of detail required by the transparency framework. AGT is also developing a system to record and track all future rulings in order to be able to conduct an effective analysis of future rulings issued.

Review and supervision mechanism (ToR I.4.3)

28.  Angola did not yet have an information gathering process for past rulings under the transparency framework for the year in review. Angola started to put in place a revision and supervision mechanism for future rulings to be issued by requiring that the information on tax rulings is recorded in hard copy and electronically in spreadsheets in Excel format with the name, date and topic of the information requested or issue being complained or appealed.

Conclusion on section A

29.  Angola is recommended to finalise its information gathering process for identifying all past and future rulings and potential exchange jurisdictions, with a review and supervision mechanism, as soon as possible (ToR I.4).

B. The exchange of information

Legal basis for spontaneous exchange of information (ToR II.5.1, II.5.2)

30.  Angola is currently working to have in place the necessary domestic legal basis to exchange information spontaneously.

31.  Angola does not have currently in effect an agreement that would allow for spontaneous exchange of information under the transparency framework. Angola is not a Party to the Multilateral Convention on Mutual Administrative Assistance in Tax Matters: Amended by the 2010 Protocol (OECD/Council of Europe, 2011) (“the Convention”). Angola is encouraged to continue its efforts to expand its international exchange of information instruments to be able to exchange rulings. It is however noted that jurisdictions are assessed on their compliance with the transparency framework in respect of the exchange of information network in effect for the year of the particular annual review.

Completion and exchange of templates (ToR II.5.3, II.5.4, II.5.5, II.5.6, II.5.7)

32.  Angola is still developing a process to complete the templates on relevant rulings, to make them available to the Competent Authority for exchange of information and to exchange them with relevant jurisdictions. Angola acknowledges that an information exchange unit has been recently created to assume the role of the Competent Authority and legislation and procedures for the functioning of the unit are being developed.

33.  For the year in review, Angola had not undertaken any exchanges of information.

Conclusion on section B

34.  Angola is recommended to continue to put in place a domestic legal framework allowing spontaneous exchange of information on rulings and to continue its efforts to complete the templates for all relevant rulings and to ensure that the exchanges of information on rulings occur as soon as possible (ToR II.5).

C. Statistics (ToR IV)

35.  As no information on rulings was exchanged for the year in review, no statistical data can be reported.

D. Matters related to intellectual property regimes (ToR I.4.1.3)

36.  Angola does not offer an intellectual property regime for which transparency requirements under the Action 5 Report (OECD, 2015) were imposed.

Summary of recommendations on implementation of the transparency framework

 

Aspect of implementation of the transparency framework that should be improved	Recommendation for improvement
Angola has not yet finalised the steps to have in place its necessary information and gathering process.	Angola is recommended to finalise its information gathering process for identifying all past and future rulings and potential exchange jurisdictions, with a review and supervision mechanism, as soon as possible.
Angola has not yet finalised the steps to have effective compulsory spontaneous exchange of information on the tax rulings within the scope of the transparency framework.	Angola is recommended to continue to put in place a domestic legal framework allowing spontaneous exchange of information on rulings and to continue its efforts to complete the templates for all relevant rulings and to ensure that the exchanges of information on rulings occur as soon as possible.

References

OECD (2017), BEPS Action 5 on Harmful Tax Practices – Terms of Reference and Methodology for the Conduct of the Peer Reviews of the Action 5 Transparency Framework, OECD/G20 Base Erosion and Profit Shifting Project, OECD, Paris. www.oecd.org/tax/beps/beps-action-5-harmful-tax-practices-peer-review-transparencyframework.pdf.

OECD (2015), Countering Harmful Tax Practices More Effectively, Taking into Account Transparency and Substance, Action 5 - 2015 Final Report, OECD/G20 Base Erosion and Profit Shifting Project, OECD Publishing, Paris. https://doi.org/10.1787/9789264241190-en.

OECD/Council of Europe (2011), The Multilateral Convention on Mutual Administrative Assistance in Tax Matters: Amended by the 2010 Protocol, OECD Publishing, Paris. http://dx.doi.org/10.1787/9789264115606-en.