Cabo Verde's CIT, called Imposto sobre o Rendimento das Pessoas Colectivas, is levied both on profits obtained within the Cabo Verdean territory and those obtained outside by resident companies (worldwide principle). Non-resident companies with a PE in Cabo Verde are also subject to CIT on Cabo Verdean-source income attributable to the PE.
Taxable profit is computed according to the local accounting rules and adjusted for tax purposes.
For the purposes of determining taxable income, CIT payers can be taxed under two methods/regimes as follows:
- Special regime for micro and small-sized companies:
- Micro-sized company: An entity that employs up to five persons with an annual turnover (gross amount of sales and services) that does not exceed CVE 5 million.
- Small-sized company: An entity that employs between six and ten persons with an annual turnover (gross amount of sales and services) of between CVE 5 million and CVE 10 million.
- Micro and small importers: Importers whose customs value of imported goods does not exceed the value of turnover on an annual basis for the purpose of qualifying under the simplified scheme for micro and small-sized companies.
- Standard organised accounting regime (standard/normal regime under which the computation of profits follows the local accounting rules).
Income tax rates
Resident companies are subject to a tax rate of 22%, where taxable income corresponds to the profit less any tax benefits and any losses carried forward, as stated in the tax return. The tax rate of 22% is also applicable for PEs of non-resident companies.
Micro and small-sized companies are subject to a single special tax (SST) of 4% levied on the gross amount of sales obtained in each taxable year, to be paid quarterly. The SST replaces the CIT, fire brigade surtax, and VAT, as well as the contribution to social security attributable to the company.
Non-resident companies without a PE are subject to WHT rates applicable for each income category foreseen in the Tax Code, which range between 1% and 20%.
The CIT rate is increased by a fire brigade surcharge, called Taxa de Incêndio, of 2% on the tax due, leading to a final tax rate of 22.44%. This surcharge is levied in the municipalities of Praia (Island of Santiago) and Mindelo (Island of São Vicente).