Angola – Recent Amendments affecting payroll

Legal Framework for Mandatory Social Security Protection and Social Security Contributions

Presidential Decree No. 227/18, dated September 27th, 2018, approves the new Legal Framework for Mandatory Social Security Protection and Social Security Contributions, repealing the Decree No. 38/08, dated June 19th. Essentially, the following points stand out within this new regime:

  • Scope:
    • Employers and equivalent entities and employees who are covered by Mandatory Social Protection;
    • Other special regimes that comprise the Mandatory Social Protection.
  • The contribution rate remains set at 8% for the employer and 3% for the employee, of the total remuneration of the employee upon which the contributions are levied.
  • Significant broadening of the basis for Social Security contributions, being considered the total gross amount of allowances of the employee, namely all cash benefits which, according to the legal labour relationship, are owed by the Employers to the employees.
  • The following cash benefits are excluded from Social Security contributions taxable basis:
    • Social benefits paid by the employers within the scope of Mandatory Social Protection (e.g. Family allowance);
    • Vacation allowance.
    • The amounts corresponding to the subscription or participation made by employees and employers of complementary social protection arrangements as foreseen in specific legislation.
    • The amounts corresponding to the subscription or participation made by employees and employers of complementary social protection arrangements as foreseen in specific legislation.
    • The amounts corresponding to the subscription or participation made by employees and employers of complementary social protection arrangements as foreseen in specific legislation.
  • The contributions payment, whether owed by the employer or due by the employee, is responsibility of the employer and should be made through the withholding mechanism, directly upon the employee’s allowances.
  • The deadline for payment of the monthly contributions is maintained (until the 10th day of the following month), and the non-compliance of this deadline is subject to the payment of interests at the rate of 1% per month, upon the initial amount due.
  • This Decree enters into force 90 days after the date of its publication, this is, on December 26th, 2018.

Make your B-BBEE spend a “Pay-Back” and not a “Pay-Away”

Section 12J investments have gained significant attention over the last 2-3 years due to their attractive tax benefits. By offering investors a full tax deduction for the amount they invest, section 12J of the Income Tax Act essentially gives investors back their tax money in the year in which the investment is made, and that deduction will be permanent if the investment is held for five years.

At a first glance, this legislation is more beneficial to individuals and trusts than businesses, since they pay higher marginal rates than companies. However, there is another aspect to Section 12J investments that could potentially be of significant value to local companies.

By investing into a correctly structured Section 12J VCC fund, a South African company’s investment will qualify as spending on enterprise and supplier development under the new BEE codes. As such, “Corporate South Africa” could get empowerment credits by using these vehicles.
Having this knowledge, it is hard not to maximise the benefit from ED & SD spend, through investing in correctly structured Section 12J VCC funds. We assist our clients in achieving their enterprise and supplier development (“ESD”) targets in terms of the BEE Codes, through:

  • A business who wishes to attain BEE points can use the 12J as conduit between the investor and a 51% Black Owned entity, with less than R50m in annual revenue.
  • Points can be recognised for enterprise or supplier development contributions given to entities which are at least 51% black owned, with a turnover under R50million. Contributions can be in the form of grants, loans, equity investments, etc, per Annexe 400B of Code 400.
  • The 12J would act as a 3rd party and would direct the investment to a suitable beneficiary. The 12J could have a number of beneficiaries.
  • Converting their ED and SD expenditure into a valuable investment
    This then becomes a huge benefit to companies who are currently writing off their ED or SD spending as a donation or simply an expense.
  • By using a Section 12J vehicle you not only get a tax rebate, but also end up with an investment that can generate returns and become a “pay-back” after 5years….

At WTS we remain firm on our transformation advisory objectives which is aligned to the National Growth Plan and our country’s Vision 2030. In this regard we offer our clients a unique suite of solutions including Economic Transformation Services and ensure compliance, sustainability, spend optimisation and collaboration opportunities which includes beneficiary impact assessments and reporting. We are proud to announce our partnership with nReach One, a duly registered section 12J Fund, which is uniquely positioned to optimize the value we offer to both our Multi-National and local clients.

South Africa has spent over R10 billion on CSI during 2018 alone, however, we have not seen the expected impact and positive results of this allocation.

Contact WTS to find out how we can, together, make a positive, sustainable impact during 2019 and not repeat past mistakes.

For more information, contact:
Tel: +27 (0) 12 003 7009
info@wts-southafrica.com

WTS Business Services Becomes First International Distributor for the Digitised Corporate Governance Framework® Software ̴ Praefectus™

WTS Business Services (Pty) Ltd (‘WTS BS’) is pleased to announce its appointment as an international distributor of the cloud-based Praefectus™ software platform, which empowers the acclaimed Corporate Governance Framework®.  Praefectus™ was jointly developed by two South African companies, CGF Research Institute (Pty) Ltd (‘CGF’) and Madjenta Holdings (Pty) Ltd.

 As an organisation which provides an array of governance and business consulting services, which include specialist tax, financial and technology advisory services in South Africa, WTS BS is ideally suited to add the Praefectus™ software to its suite of professional services.  As a global entity which is well established in over 100 countries internationally, the company is excited to take this product to Europe and Africa, and then expand to other continents.

Charl Niemand, Chief Executive Officer of WTS South Africa (a member firm of WTS Global), says that the appointment of WTS BS as an international distributor of Praefectus™ could not come at a better time.  “We are looking forward to further embrace certainty, transparency, investor confidence and good governance in South Africa and Africa, as required by our local and multi-national clients,” he says, “and we believe that the implementation of the digitised Corporate Governance Framework® within organisations will achieve this end.”

The Corporate Governance Framework®

While good governance is often touted as a lofty ideal, it can now be given practical application in the form of the digitised Corporate Governance Framework®, which provides, among other things, an electronic dashboard to assist vested, key stakeholders to manage an organisation’s governance processes and determine the status of good governance across the organisation.  It also provides an organisation and its assurance providers with the capability to attest to a greater level of its enterprise-wide corporate governance status, and improved levels of transparency, including better oversight and monitoring at board and management levels.

The Corporate Governance Framework® provides a singular schematic view of an organisation’s overall strategic and operational governance position in real time, from the perspectives of board accountability and management responsibility, and therefore unequivocally demonstrates the organisation’s culture and acceptable standards of behaviour.  It also focuses the organisation, through its board of directors and key senior executives, on those aspects of the business which require attention, those which have improved over time, and those which are running optimally, from a GRC point of view. 

Why WTS BS believes in Praefectus™, the enabler of the digital Corporate Governance Framework®

In the current turbulent global socio-economic climate, it is a given that good corporate governance is essential.  All organisations are required, by codes of good governance, legislation and regulation, as well as by their stakeholders, to operate ethically and sustainably within their realm of influence, with a fundamental focus to create value.  Organisations are required to be responsible corporate citizens and to be seen as such, in order to be sustainable over time.

The Praefectus™ software assists an organisation to achieve this end, by providing relevant, concise, holistic and timeous information to its stakeholders on the strategic direction, performance, risk and opportunities which it faces.  By focusing and reporting on material items — and how these are inter-linked — an organisation is able to foster a culture of transparent and meaningful communication, and in so doing, continuously build trust with each of its key stakeholders.

According to Niemand, “the products and services WTS offers to its clients will be immeasurably enhanced with this carefully selected Praefectus™ software which fits perfectly with our current product portfolio and aligns with our own values and high standards of governance and ethics.”

More about WTS

The WTS BS team consists of top consulting specialists, with many years of business experience, who advise organisations on a suite of corporate governance services, which include Enterprise Resource Planning (ERP), Data Management and Reporting, Artificial Intelligence, Bespoke Business Systems, Blockchain, System Development, Forensic Services, Digital Marketing, Management and Financial Services, B-BBEE and Business Development, among others.  These services fit ideally within an organisation’s Corporate Governance Framework®.

With representation in over 100 countries, WTS Global has grown to a leadership position as an international tax practice, which offers a full range of tax services and aspires to become the preeminent non-audit tax practice worldwide.

WTS Global deliberately refrains from conducting annual audits in order to avoid any conflicts of interest, and to be the long-term trusted advisor for its international clients.  Clients of WTS Global include multinational companies, international mid-size companies, as well as private clients and family offices.  The member firms of WTS Global are carefully selected through stringent quality reviews.  They are strong local players in their home market, who are united by the ambition of building a truly global practice that develops the tax leaders of the future and anticipates the new digital tax world.  WTS Global effectively combines senior tax expertise from different cultures and backgrounds and offers world-class skills in advisory, in-house, regulatory and digital, coupled with the ability to think like experienced business people in a constantly changing world.

WTS Global has been acknowledged regularly as a Tier 1 network by Chambers & Partners and has been recently awarded as the European Indirect Tax Firm of the Year 2018 by International Tax Review.