The General State Budget for 2022 was enacted by means of Law No. 4/X/2021, of 31 December 2021 (“State Budget Law”), which entered into force on 1 January 2022. The State Budget for 2022 maintains some fiscal measures foreseen in the State Budget for 2021, but contains important changes, notably in relation to VAT. Below is a summary of the main fiscal changes and measures foreseen in the State Budget for 2022:
 

• The general VAT rate remains at 15% for the year 2022 (contrary to the increase of this rate to 17% set out in the draft State Budget for 2022).
   
• The 10% reduced VAT rate for the tourism sector is eliminated in 2022, with the general tax rate of 15% now also being applicable to: (i) accommodation services in hotels and similar establishments, and restaurant services; and (ii) operations organized by Tour Operator Agencies that are micro, small or medium-sized resident companies, when all related services are provided and performed in Cape Verde during 2022 (contrary to the intention to maintain the reduced rate in 2022, as set out in the draft State Budget for 2022).
   
• Creation of a Special VAT Regime for electronic commerce, applicable to international electronic commerce operations carried out in Cape Verde by taxable persons that are part of the list of major electronic commerce operators to be drawn up by the Ministry of Finance. The regime determines the types of operations covered, as well as rules for the effective application of the regime, especially regarding location, rates, taxable event, payment, supplementary regime and reporting obligations.
   
• The VAT Code is amended with regard to: (i) new information that must be included on invoices; (ii) redefinition of the rules for exempting invoicing and storage of supporting documentation for transactions subject to VAT.
   
• A specific tax on tobacco is established, with the amount of 70$00 due on each pack of cigarettes.
   
• In other matters, notably regarding incentives provided for in the State Budget for 2022, we refer you to points 4 to 8 of our Tax Alert, published on 16 December 2021, following the approval of the draft State Budget for 2022, available through the following link: https://www.mirandalawfirm.com/en/insights-knowledge/publications/alerts/state-budget-bill-for-2022-2.

For more information on this Tax Alert please contact:
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