This article provides an in-depth look at the corporate tax regime for companies operating in Cape Verde (CV) in 2025. All information is based on official figures and addresses applicable rates, assessment criteria, and notable surcharges relevant to corporate taxpayers in the country.
Overview of Corporate Taxation in Cape Verde
Currently, Cape Verde applies a straightforward flat corporate tax structure. Companies, regardless of their sector or business activity, are subject to a set percentage on taxable profits, with clear rules and minimal bracket complexity.
Corporate Income Tax Details (2025)
| Assessment Basis | Tax Type | Flat Rate (%) | Currency (CVE) |
|---|---|---|---|
| Corporate Profits | Flat | 21% | CVE (Cape Verdean Escudo) |
The corporate tax is assessed directly on company profits at a flat rate of 21% for 2025. There are no graduated brackets, simplifying calculation and compliance. The currency for assessment and settlement is the Cape Verdean Escudo (CVE). For reference, at an approximate 2025 rate of 1 USD = 100 CVE, this would represent every 100,000 CVE of taxable profits equaling $1,000 (USD conversion is indicative and should be verified for precise calculations).
Fire Brigade Surcharge for Certain Municipalities
In addition to the standard corporate tax, a specific fire brigade surcharge (Taxa de Incêndio) is levied in selected municipalities as outlined below:
| Municipality | Surcharge Rate (%) | Applicable Condition |
|---|---|---|
| Praia (Island of Santiago) | 2% | Applies to the tax due |
| Mindelo (Island of São Vicente) | 2% | Applies to the tax due |
This surcharge is imposed at a rate of 2% on the final corporate tax due and only affects companies situated in the municipalities of Praia and Mindelo. Elsewhere in Cape Verde, this surcharge does not apply.
Corporate Tax Brackets and Holding Periods
The Cape Verde corporate tax regime uses a flat rate system. As such, there are no progressive brackets—all taxable corporate profits are taxed at 21%. Information on mandatory holding periods for special rates or reliefs is not published by authorities at this time.
Key Features of the Corporate Tax Regime
- Flat Tax Rate: Simple to administer and predict, with all company profits taxed at a uniform rate.
- Local Surcharges: Companies in Praia and Mindelo should plan for the additional 2% fire brigade surcharge.
- No Published Brackets or Minimum Holdings: The tax system does not currently differentiate by profit bands or require minimum holding periods for full rate application.
Pro Tips for Optimizing Corporate Tax in Cape Verde
- Carefully assess your company’s operational base. Establishing outside Praia and Mindelo may reduce your overall tax due by avoiding the fire brigade surcharge.
- When projecting net profit distributions, always include the flat 21% tax in your estimates, as there are no lower brackets for small or emerging enterprises.
- Stay updated on municipal requirements. If your business activities expand into Praia or Mindelo, anticipate the 2% surcharge as part of annual budgeting.
- Denominate all accounts and tax calculations in CVE, but track USD conversions for external reporting and strategic planning using up-to-date exchange rates.
Official Sources for Taxation Insights
For the latest updates and official documentation regarding taxation, visit the Ministry of Finance of Cape Verde.
In summary, Cape Verde’s 2025 corporate tax system is streamlined, offering predictability through a fixed 21% rate and limited surcharges. The main exception lies in the mandatory 2% fire brigade surcharge for companies based in Praia or Mindelo. Companies should structure their tax planning accordingly and ensure compliance with local obligations, referencing official sources for any updates or clarifications.