Cabo Verde

A full WHT relief on profit distributions is in force (see Dividend income in the Income determination section).

Interest payments, in general, are subject to WHT at a rate of 20%.

Bond interest is subject to WHT at the rate of 10%, except bonds and similar financial products (except public debts) duly listed on the stock exchange, which are subject to CIT at the reduced rate of 5%.

Interest on shareholder loans or income from subscription of obligations paid to holding companies is exempt from WHT.

Royalty payments are subject to WHT at the rate of 20%.

Payments of services between resident companies are generally not subject to WHT. Payments of services to non-resident entities are subject to WHT at the rate of 15%, unless waived under the applicable tax treaty.

Rental payments are subject to WHT of 10% when paid or made available by companies. However, rental payments between resident companies are generally not subject to WHT.

For a Cabo Verde-based recipient, tax withheld is a payment on account against the final income tax due regarding income derived from (i) business, commercial, and services activities, (ii) real estate income, and (iii) employment income when the beneficiary of such income opts to file a tax return.

Any non-Cabo Verdean resident entity carrying out an economic activity in Cabo Verde is subject to a final WHT at the same rates applicable to each income category foreseen by the Tax Code.

Regarding income paid to micro and small-sized companies, the WHT applicable is 4%.

Tax treaties

Notes

1. Whenever the tax treaty rate is higher than the statutory rate, the statutory rate should apply.
2. There is a WHT exemption (WHT at the rate of 0%) if a direct or indirect participation in share capital or voting rights of at least 5% is held, consecutively, for 24 months prior to the date at which the profits are made available.
3. 0% applies to interest paid by public bodies.
4. Treaty is not yet in force.
5. 0% in case the beneficial owner is a company (except if composed by natural persons) that directly owns at least 25% of the share capital of the company that pays the dividends; 10% in the remaining cases.
6. The tax rate on technical services is capped at 10% (includes management services of a technical nature, as well as consultancy services, rendered by technical staff or other staff).
7. 0% in case the beneficial owner is a company that directly owns at least 10% of the share capital of the company that pays the dividends; 5% in the remaining cases.
8. 5% in case the beneficial owner is a company that directly owns at least 10% of the share capital of the company that pays the dividends; 10% in the remaining cases.
9. The tax rate on technical services is capped at 5% (includes management services of a technical nature, as well as consultancy services, rendered by technical staff or other staff).
10. 5% in case the beneficial owner directly holds at least 25% of the share capital for a period of 365 days (including the day of payment of the dividends), disregarding any ownership changes resulting from a restructuring such as a merger or a demerger of the subsidiary company; 10% in the remaining situations.
11. 10% in case the beneficial owner directly holds at least 25% of the share capital for a period of 365 days (including the day of payment of the dividends); 15% in the remaining situations.