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Code of Fiscal Benefits |

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Code of Fiscal Benefits | cape verde

Law No. 26/VIII/2013, of 21 January

 Code of Fiscal Benefits | cape verde Law No. 26/VIII/2013, of 21 January

Code of Fiscal Benefits Article 4

Law No. 26/VIII/2013
of 21 January
By mandate from the people, in accordance with Article 175, sub-paragraph b)
of the Constitution, the National Assembly decrees the following:
Chapter I
General Principles and Provisions
Article 1
Purpose
This Code establishes the principles and rules applicable to tax benefits,
establishes the content and sets the corresponding rules for granting and
monitoring.
Article 2
Scope
This Code applies to tax benefits therein, as well as validly approved and ratified
conventional tax benefits and those specified in separate legislation, namely
in additional codes and legislation regarding Income Tax (IUR), Value Added
Tax (VAT), Special consumption Tax (ICE), Stamp Duty, Wealth Tax (IUP) and
Legislative Decree No. 11/2010, of 1 November, which approves the benefits for
the construction, rehabilitation and acquisition of social housing.
Article 3
Concepts
1. Tax benefits are tax cuts that materially represent exceptions to the principle
of tax equality, founded by superior reasons related to economic and social
policy or other tax reasons.
2. Tax benefits can, among others, come in the form of exemptions, tax cuts, tax
credit, and tax allowances.
Principle of transparency
1. The granting of tax benefits is subject to the principle of transparency, under
which the State promotes public disclosure of the information necessary for
citizens to become aware of the main benefits, their financial impact and
their political and economic reasons.
2. Obeying to the principle of transparency, fiscal expenditure generated by the
granting of tax benefits is disclosed through the report on the Government
budget bill, including tax expenditure borne by the local authorities.
3. Obeying to the principle of transparency, through its electronic portal, the Tax
authorities annually discloses the list of legal persons to whom tax benefits
are granted dependent on recognition or contractual basis.
Article 5
Principle of Accountability
1. The utilization of tax benefits is subject to a principle of accountability, under
which taxpayers who enjoy tax benefits are subject to reinforced duties to
cooperate with the Tax authorities.
2. Obeying to the principle of accountability, taxpayers who enjoy tax benefits
are required to provide the Tax authorities the statements, documents and
information necessary to prove their assumptions at the time of granting the
benefit or during its application.
3. Obeying to the principle of accountability, taxpayers who enjoy tax benefits
are subject to systematic supervision by the Tax authorities and other
competent authorities, aimed at proving their prerequisites and possible
imposition of legally established penalties.
Article 6
Prerequisites for tax benefits
1. The tax benefits provided for in this Code are only permitted to individuals
liable to the IUR who, meeting the legal conditions to perform their activities,
cumulatively meet the following requirements:
a) Being part of the taxation system by proper accounting;

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b) Using proper accounting in accordance with the accounting standards and
financial reporting system in force in Cape Verde;
c) Using only the online electronic communication method, made available
by the tax authorities, to comply with their tax obligations; and
d) Not being taxed by indirect methods.
2. The enjoyment of tax benefits provided for in this code is reserved for
taxpayers whose fiscal and contributory situation is good, meaning those
who are not in debt or who, being in debt, have made a complaint, expressed
objection or opposition and who have provided a suitable guarantee when
required.
3. Taxpayers liable to pay the IUR who are not taxed by the proper accounting
system may enjoy the benefits provided for in Articles 20 to 25, Article 32,
paragraph 2, Articles 47 and 48, and Articles 50 to 53.
Article 7
Recognition of Benefits in Imports
1. In order to enjoy the customs benefits provided for in this code, the
beneficiary shall request the Customs Authority to inspect the effective use of
the goods eligible for such benefits whose specifications and list of goods to
be imported were previously submitted electronically to the entities involved
in tax benefit management and were previously approved by the Central
Service of the Government department responsible for the sector to exempt.
2. For purposes of inspecting the use referred to in the preceding paragraph:
a) The beneficiary must, along with the request for inspection, submit his/her
plan for using the eligible goods, which should contain the dates for their
effective use;
b) Non-appearance of the Customs Authority for inspection at the time of
use or lack of inspection shall not affect the right of the beneficiary to
the incentives granted under this code, except when it is possible to, in a
subsequent inspection, show that there was no effective use.
3. The goods on the list referred to in paragraph 1 clear customs under
suspension, with adequate guarantee, and must remain thus until they reach
their destination and are used.
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Law No. 26/VIII/2013, of 21 January
4. To inspect the effective use of the list of goods specified in the preceding
paragraphs, the Customs Authority may hire experts, with the costs being
borne by the investor.
5. The list and the specifications referred to in the preceding paragraphs shall be
submitted to the Central Office of the Government department responsible
for the sector to exempt for approval at least 60 days before the goods arrive
in the country, with the deadline to expedite the request being 30 days,
under penalty of tacit acknowledgment of the request.
6. The deadline to expedite the request referred to in the preceding paragraph
is suspended whenever the Central Service of the Government department
responsible for the sector to exempt asks for additional elements or
information, with the deadline continuing after the requested information
has been supplied.
Article 8
Constitution and recognition of tax benefits
1. Tax benefits can be automatic, in which case their granting stems from the
mere fulfillment of legal requirements, or depend on recognition, in which
case their granting requires an administrative act.
2. Where the law does not otherwise provide, the recognition of tax benefits
is the responsibility of the Government official responsible for Finance, with
the possibility of delegating this task to Directors-General or other employees
who are his/her direct subordinates.
3. Recognition of tax benefits may exceptionally be done by contract, in cases
involving establishment agreements, as provided for in the Investment Code
and to which Article 16 of this Code refers, or in cases involving a contract
to grant incentives, as provided for in Legislative Decree No. 2/2011, of
21 February 2011, concerning the internationalization of Cape Verdean
companies.
4. Save where there is a legal exception, the effects of tax benefit recognition
are reported on the date of the request, when the recognition is done by
administrative act, and on the date of the recognition itself, when it is done
by contract, always assuming the prior fulfillment of the prerequisites.
 Code of Fiscal Benefits | cape verde
Article 9
Transfer of tax benefits
1. The right to tax benefits is not transferable in life, being transferable on
death, when the transferee meets the requirements for the benefit and the
latter is not strictly of a personal nature, without prejudice to the following
paragraphs.
2. The right to tax benefits is transferable in life whenever the latter are
inseparable from the legal regime applicable to certain goods, namely where
the benefits in question are inseparable from securities or financial products.
3. The right to tax benefits recognized by contractual means referred to in
Article 8 of this Code is also transferable in life, upon authorization of the
Government official responsible for the area of Finance, provided that the
transferee meets the requirement for their enjoyment.
4. The provisions of this Article shall apply, mutatis mutandis, to legal persons
that benefit from tax benefits.
Article 10
Sanctions which impede, suspend and cancel tax benefits
Sanctions that impede, suspend or cancel tax benefits can be imposed due to
violation of the provisions of this Law or due to any other tax offense, regardless
of their relationship to the benefits provided.
Article 11
Termination of tax benefits
1. Tax benefits are terminated due to expiry, when the period for which they
were granted expires, through imposition of sanctions, by checking the
resolutive condition to which they are subordinated, or due to breach of
the obligations imposed on the taxpayer when they are attributable to the
beneficiary.
2. The termination or suspension of tax benefits, recorded in any way, imply the
automatic application of general taxation as provided by law.
3. People entitled to tax benefits are required to report to Tax authorities,
within 30 days of termination or suspension of the prerequisites of fact or
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Law No. 26/VIII/2013, of 21 January
law on which the tax benefits they enjoy are based, except in cases where
these circumstances are of official knowledge.
Chapter II
Tax Incentives for Investment
Article 12
Investment tax credit
1. Investments made under the Investment Code benefit from a tax credit by
deduction of IUR collection, for natural persons or legal entities who are
taxed by the proper accounting system, in an amount equal to:
a) 50% of relevant investments made in tourism or tourism promotion
industry and tourism property development, air and sea transportation
services and port and airport services, renewable energy production,
manufacture and installation of renewable energy equipment, scientific
research and investigation, as well as information and communication
technology development.
b) 30% of relevant investments made in other areas.
2. Deduction of the tax credit provided for in the preceding paragraph is made
in the settlement of the IUR-PC or IUR-PS, relating to the fiscal year in which
the investments are made, and it cannot, in each year, exceed 50% of the
collection.
3. The portion of the tax credit not used in a fiscal year can be deducted in
future years, with the right to use it expiring in the tenth fiscal year from the
date of the beginning of the investment (for projects in operation), or from
the commencement of operations (for new projects), subject to the limit of
the previous paragraph.
4. For the purposes of this article, we consider relevant investments in tangible
fixed assets acquired in new condition and belonging to investment projects
in the country, as well as investments involving the acquisition of patents and
licenses for use of technologies certified by the competent authority.
5. For the purposes of this article, investments in the following tangible fixed
assets are not considered relevant:
a) Land not intended for mining;
 Code of Fiscal Benefits | cape verde
b) Buildings and other structures not directly connected to the main purpose
of the investment project or intended for sale;
c) Light vehicles not directly connected to the main purpose of the investment
project;
d) Furniture and decor and comfort items;
e) Other capital goods not directly connected to the main purpose of the
investment project;
f) Administrative equipment.
6. For the purposes of this Article, we consider:
a) Beginning of the Investment: the moment when the procedure for the
recognition of tax benefits provided for in this Code is started, upon
approval of the investment project;
b) Start of operation: the moment one begins operations aimed at obtaining
yields that give rise to tax liability.
7. For the purpose of enjoying the benefit provided for in this Article, investors
must submit to the Tax authorities, electronically, the income statement for
the year and the supporting documents for the investments, according to the
Model approved by the Government official responsible for Finance.
8. Goods subject to investment sold before the end of loan recovery lose the
right to the credit as of the date of sale, while goods purchased as replacement
only enjoy the right to the remaining tax credit.
Article 13
Exemption from IUP
1. Investments made under the Investment Code which require the acquisition
of property solely for the establishment of investment projects may be
exempted from the Wealth Tax (IUP).
2. The awarding of this incentive is subject to acceptance by the competent
municipal authorities, in accordance with the applicable law, and it does
not give the Municipality the right to compensation for lost revenue due to
exemption.
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Law No. 26/VIII/2013, of 21 January
Article 14
Exemption from Stamp Duty
Operations for securing financing for investments carried out under the
Investment Code are exempt from stamp duty.
Article 15
Exemption from customs duties
1. Investments made under the Investment Code are exempt from customs
duties whenever they translate into the importation of the following goods
and such goods are connected to the main purpose of the investment project:
a) Materials and equipment directly incorporable in the establishment,
expansion or remodeling of projects, not intended for sale, namely,
steel structures, construction materials, with the exception of blocks,
cement, paints, varnishes, or PVC pipes, plumbing equipment, electrical
equipment, except incandescent light bulbs, stoves, hot plates, thermal
accumulators, refrigerators other than class A, and electronic products, as
well as their accessories and spare parts when accompanying them;
b) Equipment, machinery, tools and utensils, as well as their accessories and
spare parts;
c) New, properly equipped collective transportation vehicles, intended for
urban passenger transportation and heavy vehicles for transportation of
goods, imported by duly licensed companies in the sector;
d) Scientific, didactic and laboratory materials, furniture and equipment,
including software and means to support them, intended for technical and
scientific education, teaching or research;
e) Furniture, equipment and utensils used for establishment, expansion or
remodeling of projects with Tourism Utility status, not intended for sale;
f) Transmission towers, antennas, and poles;
g) Mobile studio for broadcasts outside the TV studio;
h) Vehicles for reporting services and exterior cars;
i) Public and mixed transportation vehicles, intended for the exclusive
transportation of tourists and luggage, pleasure boats, boards and
accessories, tools and equipment for cultural and sporting activities;
 Code of Fiscal Benefits | cape verde
j) Vehicles for transporting goods or the collective transportation of workers,
intended for the exclusive use of industrial establishments;
k) Specialized transportation vehicles, designated ambulances, intended for
the health sector.
2. The exemption provided for in sub-paragraph e) is granted during the
establishment and throughout the first year of operation.
3. The exemption provided for in sub-paragraph e) is also granted during
remodeling; it is considered expansion or remodeling when the reinvestment
corresponds to at least 25% of the initial investment.
4. The exemption from customs duties provided for in this Article excludes
equipment and vehicles older than five years.
5. Residential units that are part of tourism complexes with tourist utility status
benefit from the incentives provided for in this Code, namely in this Code,
and are therefore not considered as intended for sale, provided their owners
use them exclusively for tourism; the owners cannot to use them for other
purposes, including personal or family use, for a period exceeding 30 calendar
days in each calendar year.
6. For the purposes of the preceding paragraph, residential units must have a
tourism operator license granted by the Central Service of the Government
department responsible for tourism, renewable annually.
Article 16
Contractual tax benefits
1. Investments made under the Investment Code may benefit from exceptional
incentives relating to import duty, IUR-PC, IUP or Stamp Duty, awarded by the
Council of Ministers as part of an establishment agreement, on a proposal of
the Government official responsible for Finance, provided they cumulatively
fulfill the following conditions:
a) The investment is worth over 10 billion escudos;
b) The investment is relevant in promoting and accelerating national
economic development; considered as such are those that are part of the
Government’s program;
c) The investment generates at least 100 direct jobs within 3 years.
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Law No. 26/VIII/2013, of 21 January
2. The establishment agreement establishes the tax incentives to grant, their
objectives and goals, as well as the penalties for non-compliance, with
conventional benefits not being able to extend beyond 10 years.
3. The benefits provided by this Article shall not be cumulated with any other
benefits provided for in this Code.
4. Entities receiving incentives under this Article are subject to annual inspection
by the tax authorities, aimed at checking their prerequisites.
5. Contractual tax benefits may take the form of an exemption, deduction from
taxable income, accelerated amortization and depreciation and reduced
rates; the actual rate resulting from the application of tax benefits cannot be
less than one-fifth of the rate in force.
6. The provisions of this Article shall not apply to investments made with a view
to internationalization, referred to in Legislative Decree No. 2/2011, of 21
February.
7. The prerequisites mentioned in paragraph 1, sub-paragraphs a) and c)
are reduced by 50% whenever investments are made outside the urban
municipalities of Praia, Sal and Boa Vista.
Chapter III
Tax Benefits for Internationalization
Article 17
Tax benefits related to IUR
1. Investments which, in accordance with Legislative Decree No. 2/2011, of 21
February, are eligible for incentives for internationalization may be granted a
reduction of up to 50% of the IUR applicable to them, until the contract for
granting incentives expires.
2. Until the contract for granting incentives expires, IUR exemption may be
granted to qualified employees and expatriates, as well as qualified Cape
Verdean citizens from the diaspora who were or will be hired through an
employment contract, and who acquire resident status for the first time in
five years, for income they receive at the service of companies promoting
the investment projects referred to in the preceding paragraph performing
managerial, supervisory, quality control or training duties.
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3. The tax benefits granted under this chapter may not be combined with other
benefits provided for in this Code, except as set out in Article 29.
Article 18
Other tax benefits
Investments that, under Legislative Decree No. 2/2011, of 21 February, are
eligible for incentives for internationalization, may still be granted the following
benefits:
a) Exemption from Stamp Duty when establishing companies or increasing
capital, as well as securing financing for projects;
b) Exemption from VAT, in accordance with the Value Added Tax Regulations,
with the refund of incurred VAT being paid within 30 days, pursuant to
Decree-Law No. 65/2003, of 30 December;
c) Exemption from customs duties and fees, in accordance with applicable
law;
d) They may be exempted from IUP when acquiring real estate to establish or
expand their activity, as defined in Article 13;
e) Exemption from fees and other notarial charges when starting and registering
companies, in the form of business partnerships or sole proprietorships.
Chapter IV
Tax Benefits as part of International Business Center
Article 19
Tax benefits related to IUR
1. Entities licensed at Cape Verde’s International Business Center (CIN) receive
tax benefits in the form of reduced IUR rates related to income derived from
industrial or commercial activities and ancillary or complementary activities,
as well as service provision.
2. The tax benefit provided for in the preceding paragraph shall apply to income
from activities held only with other entities established and operating at
CIN or with non-resident entities without permanent establishment in Cape
Verde.
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Law No. 26/VIII/2013, of 21 January
3. The tax benefit provided for in paragraph 1 shall apply until 2025, depending
on the creation of a minimum of five (5) jobs at the International Industry
Center (CII) and the International Trade Center (CIC) and is reflected in the
application of the following tiered IUR rates:
a) 5% for entities with five (5) or more dependent workers;
b) 3.5% for entities with twenty (20) or more dependents workers;
c) 2.5% for entities with fifty (50) or more dependent workers.
4. At the International Service Provision Center the minimum number of jobs
required is two (2), with a IUR rate of 2.5%.
5. Without prejudice to Article 18, the benefits established by this Article may
only be granted to entities with proper accounting, in accordance with the
accounting standards and financial reporting system in force in Cape Verde,
which are based on international accounting standards; they may not be
combined with any other IUR benefits provided for in this Code; and they are
ineffective until the public disclosure of the licensee’s identity, its owners and
the jobs created, on the tax administration’s electronic portal.
6. Entities licensed at CIN are subject to annual inspection by the tax authorities,
who are responsible for supervising the prerequisites and conditions of
its tax system, applying the penalties provided for in the General Tax Code
whenever necessary.
7. The concessionaire of CIN will send a report on the activity and supervision
of licensed entities to the Government, every year, by January 31 of the
following year, under the terms to be defined by the Council of Ministers.
8. For the purposes of paragraph 5, the tax authorities shall make public
disclosure of the licensed entities and other elements therein, within 48
hours from the date of receipt of the relevant documents.
9. Conflict resolution by the arbitral tribunal provided for in Legislative Decree
No. 1/2011, of 31 January, does not apply to tax matters.
Article 20
Customs benefits
1. The entities referred to in the previous article are exempt from customs
duties on the importation of the following goods:
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a) Goods referred to in Article 15, paragraph 1, sub-paragraphs a), b) and c)
of this Code;
b) Material for packing and packaging products manufactured by the
beneficiary company;
c) Raw materials and supplies, finished and semi-finished materials and
products for incorporation into products manufactured by the company.
2. If exemption from the customs duties referred to in the preceding paragraph
is not granted at the time of importation of the goods referred to therein, the
Customs Authority shall reimburse the licensed economic operator, within
one year and at his/her request.
3. The importation of goods, products and raw materials by entities established
and operating at the CIN does not require an import license.
Chapter V
Tax Benefits for Savings and Financial Sector
Article 21
Long-term financial investments
1. Income from certificates of deposit and time deposits issued or made with
credit institutions established in Cape Verde, for periods longer than five
years, which are not negotiable, get 50% deduction from IUR, if the due date
occurs five years after and ten years before the issue or establishment or 25%,
if the due date occurs ten years after the issue or establishment.
2. Interest on emigrant time deposits are exempt from taxation.
Article 22
Savings funds
1. Income from savings funds (FPR), education savings funds (FPE) and
retirement/education savings funds (FPR/E) that are established and operated
in accordance with national legislation are exempt from IUR.
2. Pursuant to the Code, 25% of the amounts invested in the respective year by
taxpayers in the retirement savings plan (RPP), education savings plan (EPP)
and retirement/education savings plan (PPR/E) are IUR deductible, with a
50,000$00 (fifty thousand escudos) limit per taxpayer, as long as it is for their
own benefit or, in the case of PPE, also the members of their household.
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Law No. 26/VIII/2013, of 21 January
3. The amounts paid for FPR, FPE and FPR/E are exempt from IUR up to the
annual amount of 30,000$00 (thirty thousand escudos); taxation is applicable
when the amount is higher, excluding the equity component, as follows:
a) In accordance with the rules applicable to Category A income (pensions),
including those relating to pay-as-you-earn withholding, when its
perception occurs in the form of regular, periodic installments, in which
case only half of the annual income is subject to taxation;
b) In accordance with the rules applicable to Category D income (capital
income), including those relating to pay-as-you-earn withholding, in case
of full or partial reimbursement, for the entire income obtained, except
if such reimbursement occurs three years after the subscription of the
fund by the subscriber, in which case only two-fifths of the income will be
subject to taxation, at the tax rate in force;
c) In accordance with both the rules established in the preceding sub-
paragraphs, in cases where there are both terms referred to therein.
4. The amount of the PPR/E can be repaid without loss of the tax benefit, under
the terms and conditions of Article 8 of Decree-Law No. 26/2010, of 2 August.
Article 23
Securities market
1. Bond yields or products of a similar nature that are not government debt
securities, with public placement and listed on the Cape Verde Stock Exchange
pay IUR at a rate of 5%.
2. The rate referred to in the preceding paragraph only applies to income
earned through December 31, 2017, with the income earned as of that date
being taxed at the normal rate applicable to such income.
3. Dividends from listed shares are not subject to taxation, provided that they
are placed at the disposal of the holder by December 31, 2017.
4. Entities that, under the law, act as financial intermediaries in securities on
the Cape Verde Stock Exchange are exempt from IUR, during the first three
years, in respect of profits earned while performing this activity.
Article 24
Investment funds
1. Income from real estate investment trusts which are constituted and operate
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in accordance with national legislation have the following tax regime:
a) In the case of income from property, other than capital gains, obtained in
Cape Verdean territory, there is no taxation;
b) In the case of income other than capital gains obtained in Cape Verdean
territory, there is autonomous taxation at a rate of 10% on the net value
obtained in each year;
c) In the case of capital gains, they are taxed autonomously, under the same
conditions that would occur if such income belonged to individuals residing
in Cape Verde, at the rate of 10%, on the positive difference between the
gains and losses obtained in each year.
2. Taxpayers subject to IUR who own shares in transferable securities investment
fund are exempt from IUR in respect to income from shares in these funds.
3. Income from real estate investment trusts which are constituted and operate
in accordance with national legislation have the following tax regime:
a) In the case of income from property, they are taxed autonomously, at
the rate of 10%, on net income from actually incurred and properly
documented conservation and maintenance charges;
b) In the case of gains from property, they are taxed autonomously, at the rate
of 15%, which covers 50% of the positive difference between the capital
gains and capital losses.
4. For income from shares in real estate investment trusts, the tax regime
applicable is similar to that provided in paragraph 2 of this Article.
Article 25
Venture capital funds
1. Income of any kind obtained by venture capital funds established and
operated in accordance with national legislation is exempt from IUR.
2. For income from shares in venture capital funds, paid or made available to the
respective holders, either by distribution or by redemption, the tax regime in
the previous article is applicable, with the necessary adaptations.
3. The management company and the depositary are jointly liable, to
shareholders, for compliance with applicable legal and regulatory duties
and obligations arising from the incorporation of undertakings for collective
investment.
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Law No. 26/VIII/2013, of 21 January
Article 26
Savings funds in equities
1. Income from savings funds in shares established and operated in accordance
with national legislation is exempt from IUR.
2. The difference, if positive, between the amounts due at the close of savings
in equities plans and the amounts delivered by the subscriber is subject to
IUR, according to the rules applicable to category D income of this tax, at the
rate of 5%.
Article 27
Holding company
1. Capital gains and losses realized by holding companies with equity shares
held by them, provided they were held for a period not less than twelve
months, as well as the financial burden incurred with their acquisition, do
not contribute to the formation of their taxable income.
2. The preceding paragraph shall not apply in respect of capital gains and the
financial costs incurred when the equity shares have been acquired from
entities with which there are special relations, under the law, or entities
residing, headquartered or effectively managed in a territory subject to a
more favorable tax regime, as determined by IUR law, or entities residing in
Cape Verde and subject to a special tax regime.
Article 28
International financial institutions
1. The international financial institutions referred to in Law No. 43/III/88, of 27
December, enjoy the following tax benefits:
a) Exemption from customs duties on imports of materials and capital goods
which are used exclusively for their establishment;
b) Exemption from IUR up to December 31, 2017, with profits earned as of
this date being taxed at the rate of 2.5%;
c) Exemption from stamp duty in all acts they commit and all transactions
they carry out, for themselves or on behalf of others, including interest
they charge or pay, commissions, mandates and orders they execute,
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payments of any kind they pay or realize, and contracts they are a party to,
as long as exclusively relating to transactions with non-residents.
2. Non-resident natural and legal persons who are customers of the institutions
referred to in the preceding paragraph of this Article, as well as residents
regarding capital contracted from financial institutions abroad, as customers
of services that the latter can legally provide, enjoy the following tax benefits:
a) Exemption from IUR, whatever the income category;
b) Exemption from stamp duty in any act committed and any transaction
performed, including remuneration realized or paid, such as interest,
premiums and dividends, or capital gains realized from the sale of assets.
3. The IUR exemption provided for in paragraph 1, sub-paragraph b) shall not
apply to transactions with residents, which must be segregated for accounting
purposes, with the calculation of their taxable income taking into account
direct costs and structure costs corresponding to the proportion of proceeds
from these transactions in the total profits for the year in question.
Chapter VI
Tax Benefits of a Social Nature
Article 29
Job creation
1. For each job created in the previous year, taxpayers liable to IUR with proper
accounting may deduct the following amounts from their taxable income
each year:
a) 26,000$00 per job created in the municipalities of Boa Vista, Praia and Sal;
b) 30,000$00 per job created in other municipalities;
c) 35,000$00 per job created for the disabled;
2. For the purposes of this article, the number of jobs created or eliminated in
each year is calculated according to the following rules:
a) Each month, the difference between the number of employees listed in
the statement submitted to INPS in the month and the statement submitted
in the immediately preceding month is multiplied by the share assigned to
the month and then the annual average of the monthly results is calculated;
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Law No. 26/VIII/2013, of 21 January
b) The share for the month of January is equal to 12, with the share reducing
by one unit per month for each of the subsequent months; if the annual
average is positive, it is considered that jobs were created and, if it is
negative, it is considered that jobs were eliminated.
3. Tax deduction of the amounts referred to in paragraph 1 is made according
to the following rules:
a) The amount deducted from taxable income in the year in which the benefit
is provided can also be deducted from taxable income for each of the
three subsequent years, provided that no jobs are eliminated in the year
in which the benefit was granted or in any of the following years;
b) If jobs are eliminated, the tax benefit is extinguished starting the year
following that in which the elimination occurred;
c) When the collection for a given year is insufficient to deduct the total
amount, the portion not utilized can be deducted from the taxable income
of one of the five subsequent years.
4. For the purposes of paragraph 1, sub-paragraph c), the tax authorities must
ask the employer to provide proof of the employee’s disability.
Article 30
Training, internships and scholarships
1. The following charges, recorded as expense for the year by taxpayers liable to
IUR with proper accounting, are considered 150%:
a) Charges related to the training of workers;
b) Charges for hiring people aged 35 or younger for internships, and any
persons for training or retraining in companies, with a minimum duration
of six months and maximum duration of one year;
c) Charges incurred by the company and corresponding to the awarding of
merit scholarships to students aged 20 years and younger.
2. For the purposes of sub-paragraph a) above, we consider costs of training
those related to enrollment in vocational or higher education degree courses
in local education or vocational training establishments certified by the
competent authorities, as well as charges for scholarships or enrollment fees
and tuition, evidenced by certificates of attendance issued by education or
vocational training establishments to beneficiary workers.
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 Code of Fiscal Benefits | cape verde
3. For the purposes of paragraph 1, subparagraph c), the company determines
the criteria for awarding merit scholarships, with the latter being subject
to approval by the competent government department; the awarding of
scholarships must be made by public tender, to be announced before the
beginning of the school year to which it relates.
Article 31
Patronage of legal persons
1. For the purposes of determining taxable income related to IUR, the donations
granted by legal persons to the persons referred to in Article 33 of this Code
are considered expenditures for the year.
2. For the purposes of the preceding paragraph, donations granted by legal
persons are considered expenditures for the year in 130% of their value and
up to 10/1000 of the turnover.
Article 32
Patronage of individuals
1. For the purposes of determining taxable income related to IUR, the donations
given to the persons referred to in Article 33 of this code, by individuals with
category B income and proper accounting, are considered expenditures for
the year, in 130% of their value.
2. Donations given by individuals not covered by the preceding paragraph are
tax deductible in the year to which they relate in an amount corresponding to
30% of total amounts awarded, up to 15 % of the tax.
Article 33
Beneficiaries
The beneficiaries of donations that constitute patronage are:
a) Entities that carry out the works and projects in Articles 36 to 40;
b) The State and Local Governments and any of their services, establishments
and organizations, even if personalized;
c) Municipal associations;
d) The foundations in whose initial capital the State or local authorities have
stakes.
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Law No. 26/VIII/2013, of 21 January
Article 34
Recognition
1. Activities and projects to be funded are subject to recognition by the
government department responsible for their area, except when the funding
does not exceed the amounts to be set by regulation.
2. The recognition applications that do not get expressed pronunciation from
the competent body within 30 days from the date they are received by the
Administration are considered tacitly deferred.
Article 35
Conditions relating to donations
1. Donations that constitute patronage may take the form of grants and
sponsorship and be made in cash or in kind, with sponsorship being a transfer
of resources to carry out projects with advertising and promotional purposes
without direct monetary advantage for the sponsor.
2. Donations in kind may take the form of goods or services and shall be
assessed based on the constant value of the invoice or the market value in
the fiscal year in which the donation occurs.
3. In the case of a donation, the value of donated goods that counts as cost will
be the fiscal value of the goods in the year in which it occurs.
Article 36
Social patronage
In the area of social patronage, we consider relevant the donations granted to
social solidarity private institutions or similar institutions and public interest
legal persons that pursue the following purposes:
a) Rehabilitation and detoxification of people, particularly young people,
victims of the consumption of alcohol and other drugs;
b) Assistance to vulnerable people, including orphans and children of
unemployed people, people with disabilities or mental illness, charity and
social solidarity;
c) Creation of job opportunities for and social reintegration of persons,
families or groups facing social exclusion, particularly in the context of
programs to combat poverty;
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 Code of Fiscal Benefits | cape verde Law No. 26/VIII/2013, of 21 January

d) Support for the establishment and operation of daycare centers, Article 38

kindergartens and nursing homes; Patronage in sports
e) Support for the establishment and operation of associations of the disabled
In the area of patronage in sports, we consider relevant donations granted to the
and mentally ill;
National Olympic Committee, legal persons engaged in sports development and
f) Support for organizations engaged in social welfare at work; promotion, sports associations or promoters of sports, and associations with
public utility status whose objective is the promotion and practice of sporting
g) Support for associations of young researchers.
activities, for the pursuit of the following purposes:
Article 37 a) Sports and academic training;
Cultural patronage
b) Development of sports programs for poor children, the elderly and the
disabled;
In the area of cultural patronage, we consider relevant the donations granted to
legal persons and entities, public or private, who pursue the following purposes: c) Development of sports programs for schools and other institutions, seeking
sports exchanges among Cape Verdeans, including those living abroad;
a) Fostering artistic and cultural training, namely the granting of scholarships,
prizes to creators, authors, artists and their works, and cultural or artistic d) Development of sports programs in the companies themselves for
courses; employees and their families;
b) Stimulating the production and dissemination of culture and art in the e) Granting of awards to national athletes in tournaments and competitions
country and abroad, including the production and publication of works, held in Cape Verde;
exhibitions, films, seminars, arts festivals, performing arts shows, music
f) Donation of movable or immovable property to sports corporations
and folklore;
recognized by the government department responsible for sports;
c) Preserving, promoting and disseminating the artistic, cultural and
g) Sponsorship of tournaments, championships and amateur sporting
historical heritage, namely by building, forming, organizing, maintaining,
competitions;
expanding and equipping museums, libraries, archives and other cultural
organizations, as well as their collections and archives, restoring works of h) Construction of gymnasiums, stadiums and sport venues;
art and movable and immovable property of recognized cultural value, and
i) Donation of sports equipment to sports entities;
protecting folklore, handicraft and popular national traditions;
j) Donation of airplane tickets to Cape Verdean athletes to compete abroad,
d) Encouraging knowledge of cultural assets and values, including surveys,
as well as boat tickets for inter-island travels within the country;
studies and research in the field of culture and art and its various segments,
granting resources to cultural foundations for specific purposes or to k) Other activities deemed so by the government department responsible
museums, libraries, archives or other cultural entities; for sports.
e) Supporting other cultural and artistic activities recognized as such by the
Article 39
government department responsible for culture, namely by carrying out
Educational, environmental, youth, scientific, and technological patronage
cultural missions in the country and abroad, hiring services to develop
the field of safety and health
cultural projects and others considered relevant by the aforementioned
government department.
In the area of educational, environmental, youth, scientific, and technological

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 Code of Fiscal Benefits | cape verde
patronage the field of safety and health, donations granted to the following
entities are considered relevant:
a) Educational institutions where training or courses legally recognized by the
government department responsible for education and higher education
are ministered, including non-profit private schools;
b) Museums, libraries, archives, foundations and teaching or education
associations;
c) Environmental protection associations with regard to their creation and
their activities;
d) Non-governmental organizations (NGOs), environmental protection entities
or associations engaged in the creation, restoration and maintenance
of public and botanical gardens, zoological and ecological parks, in
combating desertification, in the retention, treatment and redistribution
of wastewater and rainwater, and in basic sanitation;
e) Institutions engaged in scientific and technological activities and funding
of scholarships established by the Ministry of Education and Higher
Education;
f) Schools and the media engaged in the promotion of scientific and
technological culture;
g) Children institutions or organizations as well as those for youth;
h) Youth associations with regard to their creation and their activities;
i) Institutions responsible for organizing international fairs;
j) Institutions responsible for public safety and civil protection;
k) Hospitals, health centers and other public health facilities;
l) Support for persons with no regular income who require surgery or
expensive medical treatment;
m) Health promotion associations with regard to their creation and their
activities.
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Law No. 26/VIII/2013, of 21 January
Article 40
Patronage for the information society
In the area of patronage for the information society, we consider relevant
donation involving computer equipment, computer programs, training and
consultancy in the field of computer science granted to the entities referred to
in Article 34, as well as to media organizations, public and private, engaged in
the collection, processing and dissemination of information.
Article 41
Registration and monitoring
The registration and monitoring of patrons and beneficiaries is done in
accordance with Law No. 45/VI/2004, of 12 July, which approves the legal
system for patronage and its regulations.
Chapter VII
Customs Tax Benefits
Article 42
Agriculture, stockbreeding and fishing
1. Imports of the following goods, intended for agricultural exploitation, are
exempt from customs duties, subject to the assent of the administrative
department responsible for agriculture, forestry, stockbreeding and fishing:
a) Plants, cuttings for planting, seeds, bulbs, tubers, chemical and organic
fertilizers, pesticides and other products intended for the production,
protection, disinfection and preservation of agricultural products, vitamins
and other products used to make animal feed;
b) Equipment, machinery, agricultural implements, irrigation equipment and
materials, water filtration equipment, measuring and control instruments,
water pumping equipment and their accessories and spare parts;
c) Metal structures (PVC or other material) intended for construction of
greenhouses and other structures, fences and plastic or metal netting;
d) Equipment and materials intended for setting up hydroponic production
structures;
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 Code of Fiscal Benefits | cape verde
e) Fertile eggs, chicks, semen, embryos, purebred breeding and other,
vitamins and medications;
f) Equipment for slaughtering animals and preserving meats, conifer cages,
rabbit breeding, feeders, heaters, instruments and utensils intended to
equip livestock facilities.
2. The following are exempt from customs duties:
a) The imports of fishing vessels, including sport fishing vessels, as well as
materials to manufacture or build all types of vessels and materials
intended for repairs or equipment, and spare parts of the same vessels,
including hawsers and fishing nets.
b) Excluded from the provisions of the preceding paragraph are imports of
fishing vessels and local traffic.
Article 43
Industry
Industrial companies, registered in the Industrial Registry, enjoy exemption from
customs duties on the imports of the following goods:
a) Raw materials and supplies, materials and finished and semi-finished
products intended for incorporation into products manufactured under
new industrial projects;
b) Materials that are incorporated or used in the production of goods
or services intended for the production of electricity originating from
renewable sources;
c) Materials for packing and packaging products manufactured by the
beneficiary company;
d) Raw materials and supplies, materials and finished and semi-finished
products intended for incorporation into products manufactured by the
national pharmaceutical industry.
Article 44
Civil aviation
1. Imports of the following goods are exempt from customs duties, when made
by air transportation companies, public utilities, companies engaged in the
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Law No. 26/VIII/2013, of 21 January
operation of airports and airfields, and companies authorized to provide
assistance to aircraft:
a) Construction material, including metal structures and equipment intended
for the construction, equipping, expansion or remodeling of national
airfields;
b) Aircraft, their engines, reactors, equipment, tools, parts, accessories,
including spare ones;
c) Equipment for staff training;
d) Equipment and supplies radio communications and flight safety;
e) Ground equipment and parts, spares and accessories, namely self-propelled
units for loading and unloading aircraft, conveyor belts, fire extinguishers,
tractors with special devices for maneuvering, trailers to service aircraft
at airport ramps, generators to start up engines, generators for turbine
auxiliaries for various aircraft systems, frequency conversion units to
feed aircraft electrical system, forklifts with special devices for handling,
loading and unloading luggage, platforms, special mats and stairs, startup
batteries and battery cars, air-cooled cars to serve aircraft on the ground,
cars for fire service, and other fire service materials;
f) Equipment and materials intended for workshops for maintenance and
repair of aircraft, radio communication and flight safety equipment and
materials, and ground equipment.
2. Tax benefits provided for in this Article are not cumulative with those set out
in Article 15 of this Code.
Article 45
Ship transportation
1. Exempt from customs duty is the import of commercial and towing vessels,
materials intended for manufacturing or construction, repair or equipping,
and spare parts of the same vessels, as well as road tractors and trailers
which are used exclusively on roll-on roll-off, loading and unloading ships and
which do not move beyond the port’s loading terminal or drive away more
than two kilometers.
2. The exemption for road tractors and trailers requires assent of the Maritime
and Port Authorities as regards the needs of each vessel.
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 Code of Fiscal Benefits | cape verde
Article 46
The media
Imports of the following goods are exempt from customs duties, when made by
legally established media companies and intended solely for the equipping of
their facilities or reporting services:
a) Discs, tapes and cassettes or other magnetic media, recorded or not,
including those for computers;
b) Soundproofing material of and central air conditioning equipment for
exclusive use in the studio;
c) Plates, inks, developers, offset, photographic and film equipment, including
the laboratory equipment;
d) Paper for newspaper printing;
e) Digital recording and reading equipment, blue-ray, CDs, DVDs, USB flash
drives and memory cards;
f) Video cameras and accessories;
g) Microphones;
h) Sound equipment and sound reinforcement intended for radio and
television studios;
i) Mixing desks intended for radio and television studios.
Article 47
Diplomatic and consular missions and their agents and employees
1. Exempt from customs duties, fees and other related charges, except for
charges for storage and similar services, are imports of goods, including
vehicles, intended for the official use of diplomatic missions and their
establishment or for the personal use or establishment of diplomatic agents
and members of their families living with them, so long as they are not Cape
Verdean nationals.
2. Members of the administrative and technical staff, employees of diplomatic
missions, as well as members of their families who live with them, so long
as they are not Cape Verdean nationals, also benefit from the exemption
referred to in paragraph 1 of this Article, in respect of goods imported into
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Law No. 26/VIII/2013, of 21 January
for their first establishment, up to six months from the date they arrive in the
country.
3. The provisions of paragraphs 1 and 2 of this Article shall also apply, mutatis
mutandis, to non-honorary career consular officers, their employees and
their family members who live with them, as well as employees of these
consulates, so long as they are not Cape Verdean nationals.
4. Exempt from customs duties, fees and other related charges, except for costs
for storage, cartage and similar services, are imports – intended exclusively
for official use of honorary (non-career) consular officers – of shields, flags,
signboards, seals and stamps, books, official printed matter, office furniture,
office material and equipment and similar articles supplied by the State to
the consular officer for his/her establishment, or other consumer goods
intended for National Festivals, fairs or exhibitions.
5. Diplomatic missions, career consular officers and their employees accredited
in Cape Verde import vehicles on the basis of reciprocal diplomatic courtesy,
within the following limits:
a) For diplomatic missions, non-honorary career consular officers and their
bosses – the vehicles needed, without limit, but their acquisition needs to
fit in reasonable proportion to the size of the Mission or Position and their
actual need;
b) For diplomatic agents and career consular officers - one to two cars,
depending on the personal and family needs, every three years;
c) For administrative or technical staff of diplomatic missions or career
consular officers that do not have permanent residence in Cape Verde – one
car at the time of their establishment.
6. In no case will there be exemption from customs duties and other related
charges on the imports of goods, under this article, for Cape Verdean
nationals or people of any other nationality who are members of diplomatic
missions or career consular officers with permanent residence in Cape Verde,
before they take office at the diplomatic missions or consulates.
7. The provisions of this Article shall be interpreted and applied by the
Government official responsible for Finance, after consultation with the
Government official responsible for Foreign Affairs, in the light of the Vienna
Convention on Diplomatic Relations and the Vienna Convention on Consular
Relations.
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Article 48
Cape Verdean diplomatic and administrative personnel
1. Exempt from custom duties are imports of personal property, including a
car, by a diplomatic officer transferred from external services to the central
services of the Ministry of Foreign Affairs.
2. Exempt from custom duties are imports of personal property, including a car,
by administrative or technical staff transferred from external services to the
central services of the Ministry of Foreign Affairs.
3. Vehicles imported under the conditions set out in the preceding paragraphs
shall be owned by the employee at the date of his/her return and can only be
driven by him/herself, his/her spouse and children.
4. The sale of the imported vehicle, in accordance with this article, is prohibited
before three years have elapsed from the date it arrives in the country, unless
all legal formalities involved in normal imports are complied with.
Article 49
Development aid
1. The import of the following goods is exempt from customs duty, when in the
context of international cooperation or by foreign or Cape Verdean entities or
organizations residing in the country or abroad:
a) Goods funded or offered to the State and other public entities as part of
the project for national, regional or municipal development, or to meet
the needs of the population;
b) Goods funded or offered to non-governmental institutions recognized
by the State whose sole purpose is humanitarian, religious, cultural,
educational, sports and other social purposes, non-commercial in nature,
particularly in the context of socio-economic and cultural development
projects promoted by these organizations.
2. Vehicles older than ten years are excluded from this benefit.
Article 50
Patronage, customs benefits
1. The import of the following goods is exempt from customs duties:
30
Law No. 26/VIII/2013, of 21 January
a) Goods imported by persons carrying on the non-profit activities referred to
in Articles 36 to 40 and intended for exclusive use in their activity;
b) Goods imported by patrons for donation, where the beneficiary is legally
constituted or, if not, registered at the central control service.
2. Goods exempt from customs duties cannot be transferred to third parties in
any form, until ten years from the date the exemption was granted.
Article 51
Permanent return of non-residents
1. Exempt from customs duties are imports of personal property and capital
goods, including an automobile, by non-residents returning to the country
permanently; considered as such for this purpose are individuals of Cape
Verdean nationality or origin with usual residence abroad for a period exceeding
four years as a result of personal or professional ties.
2. The exemption provided for in paragraph 1 shall apply to students residing
abroad, except in the import of vehicles, as well as brand new furniture and
equipment.
3. Excluded from this benefit are diplomatic and consular officers, civil servants
on leave and employees of companies placed abroad.
4. Light vehicles for personal use may only be driven by the beneficiary, his/
her spouse and children or, in case of disability, by a driver with the written
authorization of the Director of Customs.
Article 52
Retired foreign citizens
Retired foreign citizens who obtain a permanent residence permit, under the
specific government program for this purpose, enjoy the following benefits:
a) Exemption from customs duties on the import of a private motor vehicle
for personal use only which, besides the beneficiary, may be driven only by
his/her spouse and children or a driver hired by the beneficiary and legally
authorized by the Customs authorities;
b) Exemption from customs duties, pursuant to Decree-Law No. 38/93, of 6
July, on the import of personal and household goods, including furniture;
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 Code of Fiscal Benefits | cape verde
Article 53
The physically disabled
1. Exempt from customs duties are imports of wheelchairs and wheelchair-
accessible vehicles by individuals whose disability is proven by medical
documents and by means of a technical opinion from the Directorate General
of Road Transportation.
2. The exemption referred to in the preceding paragraph is only granted if, on the
date of application, the applicant proves that he/she does not own another car,
and it cannot be repeated until six years after the last exemption was granted.
Article 54
Musical and sports equipment
1. Imports of musical equipment and accessories not manufactured in the
country by musical groups or ensembles and music schools are exempt from
customs duties.
2. Exempt from customs duties is the import of sports equipment intended for
the practice of sports within clubs and schools by the following entities:
a) Legally recognized sports clubs;
b) Legally established sports associations and federations;
c) Legally established schools;
d) Cape Verdean Olympic Committee;
e) Municipalities and State departments that oversee the sectors of education,
youth and sport.
Article 55
Armed forces, police forces, firefighters and prison guards
Exempt from customs duties are policing and defense, instruction and cantonment
equipment, imported by the Armed Forces, National Police, Judicial Police,
Fire Brigades and Prison Guards, for the exclusive use of these corporations,
including weapons and uniforms, cars and motorcycles, transmission equipment,
ammunition or equipment intended for canine techniques.
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Law No. 26/VIII/2013, of 21 January
Article 56
Political parties and independent candidates
Exempt from customs duties are imports of materials and equipment intended
solely for electoral campaigns, by presidential candidates, political parties,
coalitions or lists proposed by groups of citizens, within the six months preceding
the date of the election to which they relate, so long as their value does not
exceed 50% of the legally set election spending limit.
Chapter VIII
Penalties and Final Provisions
Article 57
Penalties
1. The penalties applicable to infringements regarding tax benefits are provided
for in the law itself.
2. Without prejudice to other penalties provided by law, the offenses against
the provisions of this Code are subject to penalties that hinder, suspend or
cancel tax benefits, according to the seriousness of the offense.
3. Failure to comply with the provisions of Article 6 of this Code is an offense
subject to penalties that hinder benefits.
4. The following offenses are subject to penalties that suspend benefits:
a) The failure to pay taxes due to the State, so long as it occurs only once;
b) Tax, parafiscal, customs or other offenses, so long as, in accordance with
the applicable law, they are not considered serious.
5. In case of application of a penalty that suspends benefits, it is upheld until the
situation that gave rise to it is remedied, including the payment of revenue
not collected, within sixty days, counting from the date of notification by the
competent authorities.
6. Repeat of the offenses referred to in the preceding paragraph shall be subject
to penalties that cancel benefits.
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 Code of Fiscal Benefits | cape verde Law No. 26/VIII/2013, of 21 January

Article 58 Article 60
Transitional rules Coming into force

1. Tax benefits granted before this Code’s entry into force or those whose This Code shall come into force on January 1, 2013.
recognition was requested before that date are maintained, in accordance with
the terms under which they were granted, based on the law or the statutes Approved on December 10, 2012.
then in force.
The President of the National Assembly, Basílio Mosso Ramos
2. Any person entitled to tax benefits related to IUR must provide proof of such
benefits to the Tax Division of his/her fiscal area.
Enacted on January 15, 2013.
Article 59
To be published.
Revocation
The President of the Republic, JORGE CARLOS DE ALMEIDA FONSECA
Effective the date this Code comes into force, all laws that contravene it are
hereby repealed, namely:
Signed on January 16, 2013.
a) Articles 56 to 69 of Legislative Decree No. 13/2010, of November 8, which
defines the objectives of the country’s industrial policy; The President of the National Assembly, Basílio Mosso Ramos
b) Article 7 of Law No. 55/VI/2005, of 10 January, which establishes the status
of tourism utility;
c) Articles 42 to 48 of Legislative Decree No. 1/2011, of 31 January, which
creates the International Business Center;
d) Articles 17 to 23 of Legislative Decree No. 2/2011, of 21 February, which
regulates the granting of fiscal and financial incentives, conditional and
temporary, to investment projects aimed at the internationalization of
Cape Verdean companies;
e) Articles 13 to 16 of Law No. 43/III/88, of 27 December, which establishes
the system for international financial institutions;
f) Articles 2 to 18 of Law No. 45/VI/2004, of July 12, which establishes the
legal system for patronage.
g) Articles 13 and 14 of Decree-Law No. 1/2011, of 3 January, which establishes
the provisions for the promotion, encouragement, access, licensing and
exploitation inherent in the independent production and self- production
of electricity.

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Cape Verdean Investment Promotion Agency

info@cvinvest.cv | www.cvinvest.cv
Tel.: + 238 260 41 10 / 41 11 | Fax: + 238262 26 57