{"id":4608,"date":"2026-06-26T17:30:00","date_gmt":"2026-06-26T18:30:00","guid":{"rendered":"https:\/\/consultoria.cv\/?p=4608"},"modified":"2026-06-26T09:08:54","modified_gmt":"2026-06-26T10:08:54","slug":"2026-tax-reform-what-has-changed-and-how-it-affects-your-business","status":"publish","type":"post","link":"https:\/\/consultoria.cv\/en\/reforma-fiscal-2026-o-que-mudou-e-como-afeta-a-sua-empresa\/","title":{"rendered":"2026 tax reform: what has changed and how it affects your business"},"content":{"rendered":"

O State Budget for 2026<\/strong> marks a turning point in Cape Verde\u2019s fiscal history. Approved by the Law No. 69\/X\/2025<\/strong>, dated 31 December, the legislation comes into force on 1 January 2026 and introduces far-reaching changes to the national tax system. For business owners, managers and investors, understanding these changes is not merely a matter of legal compliance: it is a strategic opportunity to tax optimisation<\/strong>, cost reduction and competitive positioning in an economy that is growing at a rate of 4.71 TP3T per year<\/strong><\/a> and which received 1.25 million tourists in 2025<\/strong><\/a>.<\/p>\n\n\n\n

In this article, S&D Consultoria provides a practical and in-depth analysis of all the tax measures in the 2026 State Budget that directly affect businesses in Cape Verde. From the reduction in IRPC<\/strong> to new property tax<\/strong>, passing through the mandatory electronic invoicing<\/strong> and by the global minimum tax<\/strong> For multinational companies, we address each topic using concrete examples, comparative tables and recommendations that can be applied to day-to-day business operations.<\/p>\n\n\n\n

1. Overview: why 2026 is a year of tax reform<\/h2>\n\n\n\n

The 2026 tax reform did not come out of nowhere. It is the result of a process of legislative modernisation that began in 2013, with the adoption of the new General Tax Code, Tax Procedure Code and Tax Enforcement Code <\/a>. Since then, the Cape Verdean tax system has been progressively updated to meet the challenges of an open economy that is dependent on foreign investment and operates within a context of increasing tax globalisation.<\/p>\n\n\n\n

The 2026 State Budget comes at a particularly favourable time for the country. GDP growth has slowed slightly from its peak of 7.31 TP3T recorded in 2024<\/strong>, but remains robust, with projections of 4.71 TP3T in 2026<\/strong> e 5.01 TP3T in 2027<\/strong><\/a>. Tourism, which accounts for 25% of GDP<\/strong><\/a>, remains the main driving force, with the Government projecting that it will receive 1.5 million tourists in 2026<\/strong><\/a>. Inflation remains under control at 2,6%<\/strong><\/a>, and the budget deficit is projected at 0.91 TP3T of GDP<\/strong><\/a>.<\/p>\n\n\n\n

In this context, the tax changes introduced by the 2026 State Budget pursue three complementary strategic objectives. The first is the a gradual reduction in the tax burden on businesses<\/strong>, reflected in the reduction in the IRPC and the continuation of incentives for recruitment and investment. The second is the modernisation of tax administration<\/strong>, with the expansion of electronic invoicing and the digitisation of tax procedures. The third is the compliance with international standards<\/strong>, in particular through the implementation of the global minimum tax under the OECD\u2019s BEPS Pillar 2 initiative <\/a>.<\/p>\n\n\n\n

For businesses, these three factors send a clear message: 2026 is a year of mandatory adaptation<\/strong>, but also of specific opportunities<\/strong> for those who can anticipate changes and adjust their tax strategy accordingly.<\/p>\n\n\n\n

2. IRPC: reduction in the standard rate to 20% and new rules for SMEs<\/h2>\n\n\n\n

The most significant tax measure for the Cape Verdean business community is, without doubt, the reduction in the standard rate of Corporation Tax (IRPC) from 21% to 20%<\/strong><\/a>. Although this reduction appears modest in absolute terms, it forms part of a clear trend towards tax relief that will continue until 2028.<\/p>\n\n\n\n

The Government\u2019s rationale is clear: to make Cape Verdean companies more competitive on the international stage, to encourage private investment and to enhance the country\u2019s appeal to foreign capital. With a corporate income tax rate of 20% in 2026<\/strong>, with the expectation that 18% in 2027<\/strong> e 17% in 2028<\/strong><\/a>, Cape Verde is increasingly well-positioned compared with other jurisdictions in the region.<\/p>\n\n\n\n

For the micro, small and medium-sized enterprises<\/strong>, the benefit is even more pronounced. The first 50,000 euros of taxable income<\/strong> SMEs and small- and mid-cap companies (Small and Mid-Cap<\/em>) continue to benefit from a reduced rate of 15%<\/strong><\/a>. This means that an SME with profits of up to \u20ac50,000 effectively pays less tax than a large company, creating a system of progressive corporate taxation that protects small businesses.<\/p>\n\n\n\n

Financial Year<\/th>General IRPC Rate<\/th>SME rate (first \u20ac50,000)<\/th>Variation (general)<\/th><\/tr><\/thead>
2024<\/td>22%<\/td>17%<\/td>\u2014<\/td><\/tr>
2025<\/td>21%<\/td>16%<\/td>\u22121 p.p.<\/td><\/tr>
2026<\/strong><\/td>20%<\/strong><\/td>15%<\/strong><\/td>\u22121 p.p.<\/strong><\/td><\/tr>
2027<\/td>18%<\/td>15%<\/td>\u22122 percentage points.<\/td><\/tr>
2028<\/td>17%<\/td>15%<\/td>\u22121 p.p.<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

Source: 2026 State Budget \u00b7 Law No. 69\/X\/2025<\/em><\/p>\n\n\n\n

The reduction in IRPC has a direct impact on the tax planning of companies with organised accounting systems. A company with a taxable profit of 10,000,000$00 (ten thousand contos) will pay, in 2026, 200,000$00 less<\/strong> in IRPC than in 2025, simply as a result of the change in the standard rate. Whilst this amount is not earth-shattering for large groups, it could represent a significant injection of liquidity for SMEs operating on tight margins.<\/p>\n\n\n\n

In addition to the rate cut, the 2026 State Budget maintains the suspension of the penalty in relation to autonomous taxation<\/strong> for companies reporting losses. Originally provided for in Article 88 of the IRPC Code, this 10 percentage point increase was suspended by the Tripartite Agreement on Wage Increases and Economic Growth in October 2024 and remains in force throughout 2026<\/strong><\/a>, protecting companies in difficulty from being penalised twice for tax purposes.<\/p>\n\n\n\n

3. End of the IUP: the IPI and ITI, the new property taxes, are introduced<\/h2>\n\n\n\n

The most far-reaching reform of the tax system in 2026 does not concern the IRPC, but rather the property tax<\/strong>. From 1 January 2026, the history Single Property Tax (IUP)<\/strong><\/a> was repealed and replaced by two new tax codes: the Property Tax Code (IPI)<\/strong> and Property Transfer Tax (ITI) Code<\/strong>, both adopted by Laws No. 55\/X\/2025 and No. 54\/X\/2025 <\/a>.<\/p>\n\n\n\n

This structural change, which was unanimously approved by the National Assembly <\/a>, clearly distinguishes between two situations that have hitherto been lumped together under a single tax: the property<\/strong> of a property and the broadcast<\/strong> (purchase and sale) of that same property. The reform is particularly relevant for companies in the property, tourism and construction sectors, but it also affects any company based in its own premises or which carries out property transactions in the course of its business.<\/p>\n\n\n\n

3.1. IPI \u2014 Property Tax (0.1% per annum)<\/h3>\n\n\n\n

O IPI<\/strong> is the new annual property tax. It is levied on the taxable value of buildings situated within the national territory and is payable by the owner on 31 December of each year. The The overall rate is 0.1%<\/strong>, with the exception of land, which is subject to 0,15%<\/strong><\/a>.<\/p>\n\n\n\n

The big change lies in the valuation method. The taxable value will now be determined by a objective assessment formula<\/strong> which takes multiple factors into account, replacing the previous system, which was often out of date and prone to producing distortions. This assessment is carried out by Municipal Assessment Committees<\/strong>, thereby enhancing the transparency of the process <\/a>.<\/p>\n\n\n\n

For a company with an office property valued at 50,000,000$00, the annual IPI will be just 50.000$00<\/strong> (0.1%), which is significantly lower than the amount it would have paid under the previous IUP.<\/p>\n\n\n\n

The IPI also introduces mechanisms for encouraging the productive use of land<\/strong> and from penalties for urban dereliction<\/strong>. Vacant, derelict or dilapidated urban buildings are subject to a increase in the rate<\/strong>, whilst properties used for economic activities may benefit from non-temporary non-subjection<\/strong> during periods of construction or marketing <\/a>.<\/p>\n\n\n\n

3.2. ITI \u2014 Property Transfer Tax (~1.5% of the transaction value)<\/h3>\n\n\n\n

O ITI<\/strong> It applies to transfers of immovable property, whether for consideration or free of charge, and is generally payable by the purchaser. The reference rate stands at around 1.5% of the transaction value<\/strong><\/a>, remaining close to the amount paid under the former IUP.<\/p>\n\n\n\n

The real innovation of the ITI lies in the expansion of its tax base<\/strong>. In addition to traditional buying and selling, the tax now applies to legally complex transactions that were frequently used to circumvent taxation, such as <\/a>:<\/p>\n\n\n\n