Cabo Verdean tax resident individuals are subject to personal income tax (PIT) on a worldwide basis (i.e. resident individuals are subject to tax on all income, regardless of whether it is earned within the Cabo Verdean territory or overseas). While taxpayers have the option to include Category A income in their annual tax return, it is mandatory to declare income from Category B (with organised accounting) and Category C. See the Income determination section for further information.
Non-resident individuals are subject to PIT only on Cabo Verdean-source income at flat tax rates that are the same as those applicable for resident taxpayers.
Individuals can be taxed under two different tax methods: declarative (self-assessment method) and final withholding method.
Under the declarative method, individuals are taxed according to their annual income statement. This method is mandatorily applicable to (i) taxpayers taxed under Category B (business and professional income) with standard organised accounting, and (ii) taxpayers taxed under Category C (rental income).
This method is also applicable to dependent workers (Category A) who opt to file the tax return, on the income obtained abroad by resident taxpayers, and on the income obtained in Cabo Verde by non-resident taxpayers that could not be taxed at flat rates.
The total income will be subject to taxation at rates ranging between 16.5% and 27.5%.
Final withholding method
The final withholding method is applied to collect taxes when taxpayers are not obligated to submit their annual income statement in the following cases: Categories A, D, E, and under the Special Regime for Small and Micro Sized Companies (SRSMC).
Such income is taxable according to the WHT applicable for each category (see the Income determination section).
Personal income tax rates
The tax rates applicable in the case of the declarative method and on unjustified net wealth increases are the following:
|Taxable income (CVE*)||Tax rate (%)|
* Cabo Verdean escudos
An exemption from taxation applies to net income of up to CVE 220,000 annually.