Cabo Verde

December 2023

2024 State Budget Law published

Law 35/X/2023, of 31 December, published in the Official Gazette, approves the 2024 State Budget Law. It is effective, in general, as of 1 January 2024. The measures proposed have been enacted, of which we highlight:

• Reduction of the CIT rate to 21% 
• Elimination of the seven-year limit for the deduction of tax losses. 
• Introduction of a special tax regime for group companies 
• Clarifications on transfer pricing rules
• New exemptions from Customs Duties and VAT o:

• • Industrial production of inerts and for waste recycling.
  • Promotion of alternative products to single-use plastic objects.
  • Alternative products to single-use plastic products.
  • Machines, equipment and their accessories and separate parts, as well as all types of material intended for recycling waste and the production and marketing of alternative single-use plastic products in the national territory, within the scope of incentives for private investments.

• Amendments to existing incentives regimes, namely
• Tax credit for investment.
• Contractual tax benefits.
• Incentive for company capitalization.

• Maintenance of tax benefits in 2024, namely
• R&D tax incentives for companies.
• Incentives to professional activities carried out remotely outside the national territory.
• Incentives for the production of renewable energy. 
• Incentives to electric mobility.

For further detail, please see our Tax Flash.

May 2023

Large Taxpayers: amendments to the criteria for selection

Decree 24/2023, of 18 May, amends Decree 55/2013, of 14 November, which establishes the criteria for the selection of taxpayers whose tax status must be accompanied by the Special Office for Large Taxpayers.

Several amendments have been introduced. Highlight for the taxpayers whose tax status implies being accompanied by the Special Office for Large Taxpayers:

• Entities with a turnover above CVE 300,000,000 (Euro 2.7 million) - previously, CVE 200,000,000 (Euro 1.8 million).
• Alongside with the existing situations:

i) Entities under the supervision of the Central Bank of Cabo Verde;

ii) Entities carrying out telecommunications activities, production and distribution of water and electricity;

iii)   Other entities that are regarded as relevant, considering, namely, their corporate relationship with the companies already specified in the legislation; and

iv) Other entities upon nomination of the National Director of State Revenue, duly justified.

The Decree entered into force on 19 May 2023.