Cabo Verde – 2027 State Budget Law Proposal
19/10/26
In brief
The 2027 State Budget Law Proposal was submitted to Parliament on 1 October. No major changes to the proposal are expected, given the current Government’s absolute majority.
In detail
Among the various fiscal measures enacted, we highlight the following:
I - New tax measures
A. PIT (IRPS)
Payments of withholding tax on rental income (Category C)
It is proposed that, where the entities required to withhold tax fail to comply with that obligation, recipients of Category C income (rental income) obtained in the national territory may opt to file the relevant tax return and pay the tax that should have been withheld directly to the State, within the time limits and under the terms provided for by .Exercising this option fully discharges the recipient’s tax liability on that income. It is a subsidiary option and does not release the defaulting entities from liability for tax infringements or from the related penalties provided for by law.
Disposal value of shareholdings
It is proposed that, on the disposal of shareholdings, the disposal value be deemed to correspond to the quoted price, in the case of shares listed on a stock exchange, or to the value reflected in the company's latest balance sheet, in all other cases, whenever the declared value is lower.
B. VAT
Rate on electricity and water supplies
The 8% VAT rate on supplies of electricity and water is extended to taxable persons.
VAT Code - Amendments on eletronic invoicing
Amendments to the VAT Code on electronic invoicing are proposed, covering the requirements for issuing, recording and retaining documents, self-billing and the invoicing of rental income, as well as the rules on VAT chargeability and deduction in contingency situations and the mechanisms for certification and the integrity of IT systems.
II - Tax measures maintained
A. Taxes and charges
Pillar Two - Qualified global minimum tax (Imposto Mínimo Global Qualificado or IMG)
The provision that introduced the IMG, in the 2026 State Budget Law, will be carried carried over into the 2027 State Budget Law Proposal.
Carbon Tax
The carbon tax introduced by the 2025 State Budget Law will remain in force under the 2027 State Budget Law Proposal.
B. Tax Incentives and benefits
The following tax incentives and benefits , among others, will be maintained in 2027:
- R&D for companies;
- Young Start-up (“Start-up Jovem”);
- Reinvestment of profits;
- Financing of companies;
- Additional deductions for the acquisition of accounting and invoicing equipment and software;
- Incentives for hiring and professional internships;
- Emigrants;
- Professional activity performed remotely for parties outside the national territory;
- Incentives for the import of passenger transport vehicles;
- Incentives for the import of heavy tourist transport vehicles;
- Import of off-road vehicles for adventure tourism;
- Incentives for the import of animals, animal feed, medicines, irrigation materials, greenhouses, food-transport equipment, and agricultural implements;
- Waste recycling and promotion of alternatives to single-use plastic items;
- Industrial production of aggregates.
Housing rent and exclusivity allowances granted under parliamentary law
It is proposed to repeal the tax exemption applicable to housing rent allowances and exclusivity allowances granted under parliamentary law.
Specific levy on used vehicles up to four years old
It is proposed to repeal the specific levy of CVE 100,000 provided for in the Customs Tariff on imports of used vehicles up to four years old, without prejudice to the application of excise duty (Imposto sobre Consumos Especiais or ICE) under the legislation in force.
© 2026 PwC. This communication is of an informative nature and intended for general purposes only. It does not address any particular person or entity nor does it relate to any specific situation or circumstance. PricewaterhouseCoopers Tax Services TLS, Lda. We will not accept any responsibility arising from reliance on information hereby transmitted, which is not intended to be a substitute for specific professional business advice.
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