In Cabo Verde, companies generally follow a January to December tax year. An alternative accounting period requires Ministry of Finance approval, including for foreign businesses with permanent establishments or other economically justified circumstances.
Filing and Advance Payments
Calendar year taxpayers must submit returns and calculate their final liability by 31 May the following year. Approved alternative periods carry a filing deadline of five months after closing.
Under the standard regime, companies make advance payments based on the previous year’s income tax liability: 30% in March, 30% in July, and 20% in November.
Micro and small enterprises face a 4% turnover tax covering sales and services, with advance payments due at the end of April, July, October, and the following January.
Audits and Recordkeeping
Cabo Verde has no prescribed audit timetable. The limitation period is five years. Authorities scrutinise vehicle expenditure, communications, business entertainment, payroll, management charges, and payments abroad. Maintaining supporting records helps businesses explain these costs during reviews.
Large Taxpayer Oversight
The Special Tax Office monitors businesses meeting any qualifying condition: annual turnover above CVE 200 million, software assessed high inherent risk, or combined tax payments exceeding CVE 15 million. The payment threshold includes corporate income tax, withholding tax, VAT, and stamp duty.
Frequently Asked Questions
What tax year do companies follow in Cabo Verde?
Companies generally use the calendar year. A different period requires approval from the Ministry of Finance.
When are corporate tax returns due?
Calendar year returns are due by 31 May the following year. Companies with approved alternative periods must file within five months after their year ends.
When must companies calculate their final tax liability?
Calendar year taxpayers must self-assess their final tax liability by 31 May of the following year.
How are standard advance tax payments calculated?
Companies pay 30% of the previous year’s income tax liability in March, another 30% in July, and 20% in November.
What tax applies to micro and small businesses?
These businesses face a 4% turnover tax on sales and services, with advance payments due in April, July, October, and the following January.
Read Also: How Personal Income Is Taxed in Botswana
Does Cabo Verde follow a fixed tax audit schedule?
No. The article identifies no prescribed timetable for tax audits.
How long is the tax limitation period?
The limitation period is five years.
Which expenses attract attention from tax authorities?
Authorities focus on vehicle costs, communications, entertainment, personnel expenses, management fees, and payments to non-residents.
What makes a company a large taxpayer?
A company qualifies by meeting any one condition: turnover above CVE 200 million, high assessed inherent risk, or combined qualifying tax payments exceeding CVE 15 million.