Living in Cape Verde: residency based on two criteria, worldwide income and displays of wealth

In the original 2014 text of the Personal Income Tax Code (IRPS), a resident is defined as someone who has stayed in the country for more than 183 days, or who has a dwelling there as their habitual residence on December 31st. Residents are taxed on all their income, including income earned outside the country. Non-residents are taxed only on income earned within the country. Note: all articles cited on this page come from this 2014 text, published by the Ministry of Finance. Two laws from 2020 and 2021 amended the tax codes, and their content is not reproduced here: the current status of these articles should be verified with the National Directorate of State Revenue (DNRE). The DNRE withholding tax table cited below dates from 2015. This page does not cover social security or entry into the country, which are already described on our page regarding the absence of a tax treaty.

Two residency criteria to be read in conjunction with Article 21

Article 21 of Law No. 78/VIII/2014 of December 31, 2014, which approves the IRPS Code, addresses several situations. Two are of interest to most families:

1. having stayed in the territory for more than 183 days, consecutive or not, over a period of twelve months; ;
2. to have, on December 31st, a dwelling which constitutes the habitual residence.

The text also provides for other specific situations, which this page does not detail. The two criteria above are alternative: the second does not depend on any number of days. Therefore, according to the text, a dwelling that is your habitual residence on December 31st is sufficient to establish you as a resident.

Resident or non-resident: what is taxed

In the 2014 text, Article 20 establishes the rule. Residents are taxed on all their income, including income earned outside the territory. Non-residents are taxed only on income earned within the national territory. Article 22 lists the income deemed to be earned in Cape Verde, including income from dependent employment.

A resident who pays tax abroad is entitled, under Article 56, to a tax credit for international double taxation. This credit is equal to the lesser of two amounts: the tax paid abroad, or the portion of income tax that corresponds to income taxable in that country.

Five income categories, five schemes

The code classifies income into five categories. The DNRE publishes a withholding rate matrix for 2015 on its IRPS page; for other years, the rates should be checked on the DNRE website.

The DNRE specifies that, for a non-resident without a permanent establishment, withholding tax follows the rules of the tax code and that its rate depends on the nature of the income. A tax treaty may modify this regime; the list of treaties in the BOFiP (Official Bulletin of Public Finances) does not include Cape Verde.

Article 45 scale: a 2014 text to be verified

For income subject to global taxation, Article 45 of the 2014 text sets three rates and exempts a first part of the income.

Taxable income up to 220,000 escudos is exempt. The text does not specify whether these rates apply in brackets or to the entire income; therefore, we are not calculating any tax. Two amending laws to the tax codes (Law 86/IX/2020 of April 28 and Law 116/IX/2021 of February 2) are published on the Ministry's website. Their content is not reproduced here; the current status of these brackets, as well as that of the other cited articles, should be verified with the DNRE (National Directorate of Revenue).

Dividends and capital gains: what the 2014 legislation stipulates

Income derived from equity investments is exempt at 50% of its value (Article 39). For category D, Article 49 sets a withholding tax of 20%, without the option for full taxation. Income referred to in paragraphs (f) and (j) of Article 14, which notably include interest on debt securities and dividends, is subject to a withholding tax of 10%.

For category E, Article 50 sets 1 % for winnings from paragraphs a) to d) of point 1 of Article 17 and 20 % for winnings from games, lotteries, and bets. The content of these paragraphs is not reproduced here: do not infer the treatment of a given transfer from this line.

Displays of wealth: a presumed income

Article 42 of the 2014 text links to category E a presumed income, calculated on a table, when the taxpayer or his household acquires certain goods.

The text takes into account assets acquired in the previous year or three years. It is the taxpayer's responsibility to demonstrate that their declared income accurately reflects reality and that the source of these acquisitions is different. The income thus determined is subject to the rate stipulated in Article 45.

Declaring: Form 112 and foreign income

The annual tax return is filed using form 112. The DNRE (National Directorate of External Revenue) guidelines, which apply to income earned from 2015 onwards, reiterate Article 74 of the tax code: the deadline is the end of March if you only receive Category A income, and the end of May for other categories. For Category D and E income earned abroad, the guidelines state that filing a return is mandatory. Section 18 is used for the tax credit: it requests the country that levied the tax, the income category, the gross amount, and the tax paid abroad.

Company: IRPC

The corporate income tax (IRPC) rate is 25% for taxpayers with formal accounting practices, according to the DNRE. The simplified tax regime for micro and small enterprises is taxed at 4% of the previous quarter's turnover. Withholding taxes on dividends paid to a non-resident by a Cape Verdean company are not addressed here.

Capital income received abroad: typical case (fictitious profile)

Situation. A fictional family moves to Cape Verde mid-year. They rent a property there which will be their primary residence on December 31st. They receive dividends from companies located outside the country.

Issue. She wants to know if this income needs to be declared locally and if tax already collected elsewhere counts.

Strategy. She first checks the criteria in Article 21, then the rule in Article 20 regarding income earned outside the territory. She then prepares the declaration of foreign-source Category D income and the supporting documents for foreign tax paid for section 18.

Result. According to the 2014 text, she is considered a resident by virtue of her habitual residence, regardless of the number of days spent there, and her foreign income is included. Declaration is mandatory for foreign-source capital income, and a tax credit is provided. No tax amount is specified: the method for applying the tax scale is not detailed, and the current status of these rules needs to be verified.

On the French side: tax residence and absence of a tax treaty

Article 4 B of the French General Tax Code (CGI) establishes tax residence in France if one of the following criteria is met: primary residence or place of residence, professional activity (unless secondary), or center of economic interests. The French Tax Administration's Official Bulletin (BOFiP) specifies that only one of these criteria is sufficient and that a stay of more than six months "is not an absolute criterion." The BOFiP's list of tax treaties, in effect as of April 29, 2026, does not include Cape Verde; it only lists agreements in force as of January 1, 2026. Our pages on the criteria for tax residence and the absence of a tax treaty detail the consequences.

What this page does not cover

It does not cover VAT, local savings taxation (accounts, life insurance), inheritance and wealth tax, or residence permits. These points should be verified with the Cape Verdean authorities. All the cited articles (20, 21, 22, 39, 42, 45, 49, 50, and 56) are from the 2014 text: the 2020 and 2021 laws, the content of which is not reproduced here, may have modified them, and therefore this page does not definitively provide the tax rates or other applicable rules. The DNRE withholding schedule dates from 2015. Local taxation is verified with a professional established in Cape Verde.

What changes depending on your situation

• Your length of stay and the type of accommodation you are staying in as of December 31st.
• Your income category: salary, activity, rent, capital, earnings.
• The location of your income and the tax already paid abroad.
• Your purchases of buildings or vehicles on site and their financing.
• Your French tax residence at the time of departure.

The rule depends on your situation. No results are guaranteed.