Cabo Verde Investment Income Guide 2026

Overview — Investment Income Taxation

Cabo Verde taxes investment income through withholding taxes at source for most passive income streams. The withholding tax is generally a final tax for resident individuals, meaning no further tax reporting is required. For companies, withheld tax is creditable against IRC. For non-residents, withholding tax rates may be reduced under applicable double tax treaties. The investment landscape in Cabo Verde includes government bonds, Treasury bills, bank deposits, and investment funds, each with distinct tax treatments. As an island economy with a pegged currency (1 EUR = 110.265 CVE), Cabo Verde offers a stable investment environment.

Dividends — 10% WHT (Final for Residents)

Dividends paid by Cabo Verdean-resident companies are subject to withholding tax at 10% for resident shareholders. This is a final tax for resident individuals, meaning the dividend income is not included in the individual's IRS assessment. For corporate shareholders, the 10% WHT is a creditable advance payment against their IRC liability. For non-residents, the dividend WHT rate is generally 10% (may be reduced under applicable DTTs, particularly with Portugal where rates can be 10–15%). Distributions from cooperatives and certain qualifying investments may benefit from reduced rates or exemptions.

Interest Income — 15% WHT

Interest income is subject to withholding tax at 15% for most sources:

• Government bonds and Treasury bills — 15% WHT (final for individuals, deducted at source)
• Bank deposit interest — 15% WHT (final for individuals, creditable for companies)
• Corporate bonds — 15% WHT on interest payments
• Loan interest — 15% WHT on interest paid to lenders
• Foreign currency deposits — 15% WHT for residents

The 15% rate on interest is standard across most instruments. For individuals, the WHT is generally a final tax. Interest from certain savings accounts and retirement savings products may be exempt from WHT up to specified thresholds.

Royalties — 15% WHT

Royalties paid for the use of intellectual property, including patents, trademarks, copyrights, and know-how, are subject to withholding tax at 15%. This applies to both residents and non-residents. The rate may be reduced under applicable double tax treaties. The person making the royalty payment must withhold the tax and remit it to DNRE within 15 days. A withholding tax certificate must be issued to the recipient.

Mutual Funds & Investment Vehicles

Distributions from investment funds and collective investment vehicles follow the underlying income character. Dividend distributions from equity funds carry the 10% dividend WHT. Interest distributions from money market and bond funds carry the 15% interest WHT. Capital gains distributions may be subject to the 10% CGT rate. Investment funds are regulated by the Banco de Cabo Verde (central bank) and the Securities Market Commission.

FAQs

Do I need to report dividend income on my tax return?

If you are a resident individual, the 10% WHT on dividends is final, so no further reporting is needed. Non-residents and corporate shareholders should report and claim treaty relief where applicable.

Are foreign investment income and capital gains taxable in Cabo Verde?

Yes, tax residents are taxed on worldwide investment income. Foreign dividends, interest, and capital gains should be declared in the annual tax return. Foreign tax credits may be available under DTTs.

Can I claim a refund if WHT exceeds my tax liability?

Yes, where the WHT deducted exceeds the final tax liability, you can claim a refund from DNRE by filing an annual return.

Disclaimer

This guide provides general information about Cabo Verdean investment income taxation for the 2026 tax year. Tax laws and rates may change. Always consult with a qualified Cabo Verdean tax advisor or the Direção Nacional de Receitas do Estado for advice specific to your situation. InvestmentKit does not provide tax advice.