Law No. 102/VIII/2016, of 6 January 2016, which amends and republishes the Tax Benefits Code (TBC) was recently enacted.

Below, we highlight the most significant changes introduced by the new law:

Investments tax benefits

• Investments made on industrial activities under the Investment Law, shall benefit from a tax credit in an amount corresponding to 50% of the eligible investment (previously the deduction was of 30%).

Investment Contract

• The minimum eligible investment required to obtain tax benefits under an investment contract concluded with the Government is reduced to CVE 3 billion (EUR 27 million). Previously, the minimum investment amount was CVE 10 billion (EUR 90 million);
• Reduction by 50% or 75% of the minimum investment amount and job creation required in case of investment projects implemented in designated economically less developed areas.

Cabo Verde International Business Centre

• Entities licensed to operate within the Cape Verde International Business Center (IBC) are granted an additional five year period (until 2030) to benefit from reduced corporate income tax (Imposto sobre o Rendimento das Pessoas Coletivas – IRPC) rates;
• Shareholders of entities licensed to operate within the IBC may be exempt from taxation on dividends and interest received.

Business Recovery and Insolvency Procedures

• New IRPC, personal income tax (Imposto sobre o Rendimento das Pessoas Singulares – IRPS), stamp duty and property tax benefits are available for companies under recovery of business and insolvency procedures;
• The changes to the TBC entered into force on 7 January 2016. The tax benefits to be granted to companies under business recovery or insolvency procedures shall only be available once the Business Recovery and Insolvency Code enters into force.

For further information about the content of this Tax Alert, please contact:

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