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Cabo Verde – 2021 State Budget Law: Tax measures


In brief

Law no. 109/IX/2020, of 31 December, published in the Official Gazette, approves the 2021 State Budget Law. It is effective as from 1 January 2021.

In detail

Law no. 109/IX/2020, of 31 December, published in the Official Gazette, approves the 2021 State Budget Law. It is effective as from 1 January 2021.

The tax measures foreseen in the 2021 State Budget Law proposal were approved with the following amendments:

  • SAFT-CV – Corporate Income Tax incentives

An additional deduction of 30% is allowed for of costs incurred with software migration, training and parameterization of systems and digital certificate for the purposes of electronic invoicing and the Standard Audit File for Tax Purposes Cabo Verde (SAFT-CV).

  • Micro and Small Companies – Special Tax (“Tributo Especial Unificado” or “TEU”)

The payment of the TEU due in 2021 by companies subject to the simplified regime for micro and small-sized companies (“Regime Simplificado para Micro e Pequenas Empresas” or “REMPE”) can be made within the following deadlines:

- 1st Quarter: until the last day of June 2021;

- 2nd Quarter: until the last day of September 2021;

- 3rd Quarter: until the last day of December 2021;

- 4th Quarter: until the last day of March 2022.

Additionally, the payment of TEU debts regarding 2020 can be made in up to 60 (sixty) installments. Exception applies for the installments due by the employee to the social security authorities. No late assessment interest or late payment interest are due provided that the payments are made within the agreed terms.

In 2021, and exemption from TEU applies to micro companies certified under the REMPE, that has been most impacted by COVID 19, namely in the areas of transports, hotel and catering. The exemption requires proof of an effective and significant decrease of activity, namely a reduction of the turnover of 40% or more with reference to the same period in the previous year.

  • Tax debts – Payment in instalments

In 2021, the regime for payment of tax debts in installments is maintained, as provided for in article 7 of Law no. 100/IX/2020, of 11 August (2020 amending budget) with the following specification:

- Debts that have not been negotiated and remain unpaid in 31 December 31are automatically subject to coercive collection actions, under the terms foreseen in the applicable legislation.

  • Tobacco – Specific charge

A fee of CVE 40 (forty escudos) is introduced on import and national production, due for each pack of cigarettes.

2021 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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Rosa Areias

Rosa Areias

Tax Lead Partner, Membro da Comissão Executiva, PwC Portugal

Tel: +351 225 433 101

Leendert Verschoor

Leendert Verschoor

Transfer Pricing Partner, PwC Portugal

Tel: +351 917 887 221

Francisco  Raposo Magalhães

Francisco Raposo Magalhães

Manager, PwC Portugal

Tel: +351 213 599 618

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