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
industrial or business activities and services (note that these tax benefits are not applicable to entities engaged in tourism, banking and insur - ance, real estate or construction). CIT benefits Reduced CIT rates of 5%, 3.5% or 2.5% are applicable, respectively, to entities that cre - ate ten, 20 or 50 jobs. The CIT rate is 2.5% in the case of the creation of four jobs for enti - ties licensed to operate within the IBC. Entities licensed to operate within the IBC will benefit from reduced CIT rates until 2030. Shareholders’ benefits Shareholders of entities licensed to operate within the IBC are exempt from taxation on divi - dends and interest received. VAT and customs duty benefits All the exemptions contained in the VAT regula - tion and customs law apply. An exemption from customs duties applies with respect to certain goods, equipment and materials used within the scope of the activity developed and licensed under the IBC. Maritime Transport (Tonnage Tax) Cabo Verdean tax legislation contains a special regime for the assessment of the taxable profit applicable to maritime transport activities (ton - nage tax). Entities licensed in the IBC that carry out activi - ties related to the international maritime trans- port of persons or goods may opt for a special regime for the assessment of taxable profit, pro - vided that they fulfil the following conditions: • all the ships and vessels owned by the tax - payer must be registered in the International Register of Ships of Cabo Verde (further regu -
lation shall be published), and all the activity carried out must be eligible; and • at least 85% of the total income derives from activities carried out with other entities licensed and operating in the IBC or with non- resident entities. Under the tonnage tax regime, the taxable profit shall be determined by applying the following daily amounts to each eligible ship or vessel: • up to 1,000 net tonnes – the daily taxable income for each 100 net tonnes is CVE646; • from 1,001 to 10,000 net tonnes – CVE566; • from 10,001 to 25,000 net tonnes – CVE307; and • above 25,000 net tonnes – CVE103. No tax credits are available. If there is a change from the tonnage tax regime to the general CIT regime, the tax value of the assets held corresponds to the value resulting from the application of the general rules con - tained in the CIT Code, as if the taxpayer had not applied the special regime. In addition, tax losses or any tax credits carried forward origi - nated during the taxable periods to which the special regime applied are disregarded. Internationalisation of Cabo Verdean Companies A regime that provides for tax and financial incentives for investment projects in order to promote the internationalisation of Cabo Ver - dean companies is in force. The following incentives, to be granted under a contract of not more than three years, apply to internationalisation projects undertaken before 31 December 2020 by companies whose head
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