CABO VERDE Law and Practice Contributed by: Nelson Raposo Bernardo, Joana Andrade Correia, Manuel Esteves de Albuquerque and Júlio Martins Júnior, Raposo Bernardo & Associados
• there are no overdue wages; • their tax and contributory situation is regularised; • they are not taxed under indirect tax methods; and • authorisation is granted to all their bank accounts. The deduction cap shall apply even if the company makes capital contributions in more than one eligible company. This benefit is not cumulative with the tax benefit regarding the conventional remuneration of share capital. Other incentives The following incentives are applicable to entities that carry out, an economic activity eligible under the Young Start-Up Programme directly and as their main activity, approved by Resolution No 34/2017 of 25 April: • a CIT rate of 5%, applicable in the first five years of activity, starting 1 January 2019, except in the case of information, communication and technology and research and development enterprises, whose rate is 2.5% regardless of the location of the head office or place of effective management; • an exemption from customs duties, excise duty and VAT on the importation of one vehicle, with a maximum age of five years, for the transport of goods, comprising up to three seats in the cabin, including the driver, intended exclusively for the respective activity; • an exemption from import duties on the importa - tion of raw and subsidiary materials, materials and finished and semi-finished products intended for incorporation into products manufactured within the scope of industrial projects – the incentive shall apply if the entities are certified and registered at the Industrial Registry during the installation, expansion or remodelling phase; • financial incentives, support for capacity-building, and other institutional support provided for in the legislation of micro and small companies; • an exemption from stamp duty on financing agree - ments for the development of the respective activi - ties; and • a reduction of 50% of the fees due on notarial acts and registrations due on the purchase and sale of real estate for the respective installation.
Eligible companies whose places of effective manage - ment are located outside the municipalities of Praia, São Vicente, Sal and Boa Vista shall benefit from a tax credit of 50% of the CIT assessed (not applicable to ICT and R&D activities). Eligible companies shall benefit from the incentives provided for in Article 13 (exemption from property tax), Article 15 (exemption from customs duties) and Article 332 (training, intern - ships and scholarships) of the Tax Benefits Code, and from the incentives for employers hiring young people. Eligible companies shall be subject to the payment of autonomous taxation under the general terms con - tained in the CIT Code. Incentives for Electric Mobility The importation of electric vehicles, including two- wheel vehicles, is exempt from VAT, customs duties and excise duties. The exemption from VAT and cus - toms also applies to the importation of new recharge - able batteries for electric vehicles, including their connectors, shields, connecting cables and meters, intended exclusively for charging. Parking fees for such electric vehicles are also exempt from VAT. Incentives for the Industrial Production of Inerts During 2026, the import of machines, equipment and their accessories and separate parts for the industrial production of inerts, as well as all types of materials intended for the industrial production of inerts, are exempt from customs duties and VAT, including the extraction of minerals, applicable to projects located in the islands of Brava, Fogo, Maio, São Nicolau and Santo Antão. Tax Benefits Regarding the Recovery of Business and Insolvency There are CIT, PIT, stamp duty and property tax ben - efits for companies under recovery of business and insolvency procedures. Foreign Tax Credit Cabo Verdean tax law allows a foreign tax credit to mitigate the double taxation on foreign income taxed in another jurisdiction. The tax credit is equal to the lesser of the income tax paid abroad or the CIT frac -
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