CABO VERDE LAW AND PRACTICE Contributed by: Nelson Raposo Bernardo, Joana Andrade Correia, Manuel Esteves de Albuquerque and Mafalda Contumélias Batista, Raposo Bernardo & Associado s
Resident companies are subject to a tax rate of 21%, where taxable income corresponds to the profit minus any tax benefits and any losses carried forward, as stated in the tax return. The tax rate of 21% is also applicable for PEs of non- resident companies. Micro and small-sized companies are subject to SST of 4% levied on the gross amount of sales obtained in each taxable year, to be paid quar - terly. The SST replaces the CIT, fire brigade sur - tax and VAT, as well as the contribution to social security attributable to the company. Non-resident companies without a PE are sub - ject to WHT rates applicable for each income category stipulated in the Tax Code, which range between 1% and 20%. The CIT rate is increased by a fire brigade surcharge, called taxa de incên- dio , of 2% on the tax due, leading to a final tax rate of 21.42%. This surcharge is levied in the municipalities of Praia (Island of Santiago) and Mindelo (Island of São Vicente). Permanent Establishment Non-resident companies deemed to have a PE in Cabo Verde are also subject to tax in Cabo Verde. Under Cabo Verdean tax law, a non-resi - dent company is deemed to have a PE if one of the following applies: • it has any fixed installation or permanent representation located in Cabo Verde through which, among others, activities of a commer - cial, industrial or agricultural nature, fishing or the rendering of services are carried out (including agricultural, fishing and cattle-rais - ing explorations); • quarries or any other places of natural resource extraction are involved; or • it carries out its activity in Cabo Verde through:
(a) employees, or any other personnel hired for that purpose, for a period (continuous or not) of not less than 183 days within a 12-month period; (b) a person (a dependent agent) who is not an independent agent acting in the Cabo Verdean territory on behalf of a company, with powers to intermediate and conclude binding contracts for that company, within the scope of its business activity; or (c) a building site or a construction installa - tion if it lasts for more than 183 days, as well as activities of co-ordination, supervi - sion and inspection related to the building site or its construction installation. A PE is also recognised in the case of: • commissionaire arrangements; • preparatory or ancillary activities carried out by closely related enterprises through a fixed installation; and • independent agents acting exclusively, or almost exclusively, on behalf of one or more closely related enterprises. A PE of a non-resident is taxed as a resident company. 5.3 Available Tax Credits/Incentives Foreign Investor Status (Estatuto do Investidor Externo) Foreign Investor Status was revoked by the New Investment Law effective as of 1 January 2013; it had previously granted some tax benefits at the level of the investor (eg, exemption from WHT on distribution of profits and on interest related to the financing of the investment). Those tax benefits already granted, or for which recogni - tion has been requested prior to the entry into force of the Tax Benefits Code and the Invest - ment Code, are maintained. Investment projects
121 CHAMBERS.COM
Powered by FlippingBook