Law 4/X/2021, of 31 December, that entered into force on 1 January 2022, approves the 2022 State Budget (SB2022). We highlight the maintenance in 2022 of several CIT, VAT and other indirect taxes incentives, as well as the introduction of the special VAT regime for e-commerce.
I - Start-up scheme for youngsters (“Programa Start-up Jovem”)
The tax incentives applicable to companies covered by the “Programa Start-up Jovem” are maintained in 2022, as follows:
Eligible companies shall also benefit from the incentives provided for in article 13 (exemption from property tax), article 15 (exemption from customs duties) and article 34 (job creation) of the Tax Benefits Code, as well as of the incentives foreseen for employers hiring young people. Eligible companies are subject to the payment of autonomous taxation under the general terms foreseen in the IRPC Code.
II – IRPC credit for companies that provide financing
It is established the maintenance in 2022 of the incentives granted to resident companies and to non resident companies with permanent establishment in Cabo Verde that make cash capital contributions to:
It is allowed to deduct up to 2% of the IRPC assessed in the previous year, provided that all the requirements foreseen in the SB2022 are met. This benefit cannot cumulate with the tax benefit regarding conventional remuneration of share capital foreseen in Article 22 of the Tax Benefits Code.
III – Tax credit for hiring of trainees and unemployed people
It is established the maintenance in 2022 of the incentives granted in case of hiring of trainees and unemployed people. A tax credit of CVE 20,000 is granted to IRPC taxpayers as well as to individuals with organized accounting, under the following terms:
IV – IRPC - Additional deduction of costs incurred with equipment and accounting and invoicing software
It is established the maintenance in 2022 of the additional deduction, for IRPC purposes, corresponding to 30% of the costs incurred with:
V – IRPC - Additional deduction of costs incurred the acquisition of water and electricity
IRPC taxpayers with organised accounting are allowed to consider an additional deduction of 30% of the costs incurred with the acquisition of water and electricity.
VI – Exemption of social security contributions in hiring of young people for first jobs
It is established the maintenance in 2022 of exemption from social security contributions due by employers that hire young people for the first jobs. This incentive applies to corporations as well as to individuals with organised accounting that hire young people aged not more than 37 years for a first job. The remainder requirements established by the SB2022 should be met.
VII – Exemptions and reductions of VAT, excise and import duties on the import of vehicles
It is established the maintenance in 2022 of the following incentives:
I – Reduced VAT rate on the supply of electricity and water
The VAT rate on the supply of electricity and water to end consumers is now 8% (formerly, 15%). This rate applies to facts occurring after 1 January 2022, notwithstanding the rules on chargeability foreseen in Article 8 of the VAT Code.
II – Amendments to the VAT Code
- Issuance of invoices
(i) Information to be included in invoices
Besides the information already foreseen in no. 5 of Article 32 of the VAT Code concerning the issuance of invoices, these shall also include:
(ii) Issuance of invoices by electronic means
Invoices and amending documents are mandatorily issued by electronic means whenever established by the applicable legislation.
(iii) Property income
Invoices, receipt-invoices or receipts concerning property income, as defined in the PIT Code, shall be issued using a special series. They are required to include among other information the identification of the property, as well as the type, purpose, amount and frequency of the rental.
- Issuance of sales or service tickets in case of waiver of the obligation to issue invoices
Besides the information already foreseen in no. 3 of Article 36 of the VAT Code, sales or service tickets issued in case of waiver of the obligation to issue invoices shall also include the following information:
Identification of the respective series;
Date in which the goods are placed at disposal of the acquirer, of the provision of the service or payments taking place prior to the operation, if different from the date of issuance of the document;
Place of issuance of the document and measurement unit as well as the tax and customs taxonomy of transactions, supplies and products, as established by the Government;
The tax identification number of the acquirer upon his request; this information is mandatory in case of sales or services rendered with an amount of CVE 20,000 or higher.
Sales or service tickets are mandatorily issued by electronic means whenever established by the applicable legislation.
- Archiving of electronic documents
Electronic accounting supporting documents should be kept and archived under the terms foreseen in the regulation of electronic invoices and electronic tax relevant documents, as approved by Decree-Law 79/2020, of 12 November.
III – Special VAT regime for e-commerce
The special VAT regime for e-commerce has been approved. This applies to the e-commerce international operations carried out in Cabo Verde by taxpayers included in the list of large e-commerce players, to be prepared by the Ministry of Finance.
The regime includes a definition of international operations of e-commerce, as well as rules regarding the place of supply; taxable event; registration and declaration obligations; applicable rate; payment of tax, and a subsidiary regime applicable in case a registration is not completed. It also includes rules applicable to financial institutions that handle payments to the e-commerce players covered by the subsidiary regime.
IV – Specific charge on tobacco
A charge of CVE 70 is due per package of cigarettes.
V – Amendments to the Common Customs Tariff
The Common Customs Tariff was amended as follows:
Increase of the rates of import duties applicable to several products;
Introduction of specific rates of excise duties on the import of alcoholic beverages, new vehicles and vehicles aged up to 4 years.
© 2022 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.