Effective Tax Rate on Rental Income
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Global Property Guide
Nonresident individuals are liable to pay tax on income from sources in Cape Verde. Although the tax law is uncertain as to whether worldwide or territorial principle applies in the islands, the tax authorities state that Cape Verde follows the territoriality principle.
INCOME TAX (imposto único sobre os rendimentos)
Nonresidents are generally taxed at a flat rate of 20%.
Rental income earned by nonresidents is subject to 20% final withholding tax.
Capital gains derived from selling property connected with a business are subject to capital gains tax. In calculating the taxable capital gains, acquisition costs and incidental costs as well as improvement costs are deductible. Only 50% of the resulting capital gains are subject to tax, levied at 10% for nonresidents.
Property Tax (imposto único sobre o património)
Property tax is levied on the property value at a flat rate of 3%.
Income and capital gains earned by companies are subject to corporate income tax at a flat rate of 25%. Income-generating expenses are deductible when calculating taxable income.