VAT and Sales Tax in Sao Tome and Principe
Sao Tome and Principe imposes a Value Added Tax (VAT) known as the Imposto sobre o Valor Acrescentado (IVA). The system features a standard rate of 15%, a reduced rate of 5% on essential goods, and a 0% rate for exports.
VAT Rates
The IVA system in Sao Tome and Principe uses multiple rates:
| Rate | Application |
|---|---|
| 15% (Standard) | Most goods and services |
| 5% (Reduced) | Essential goods including basic foodstuffs, medicines, medical equipment, books, newspapers, agricultural inputs, and public transport |
| 0% (Exempt) | Exports and international transport |
Registration Threshold
Businesses must register for IVA if their annual turnover exceeds Db 1,000,000. Below this threshold, registration is voluntary but may be beneficial for businesses that wish to recover input VAT.
VAT Compliance
Filing Requirements
- Monthly Returns: VAT returns must be filed monthly, by the 20th of the following month
- Quarterly Returns: Small taxpayers may file quarterly with approval
Input VAT Recovery
Businesses can recover input VAT on purchases related to their taxable activities. Certain items are blocked from input VAT recovery, including:
- Entertainment expenses
- Passenger vehicles (partial restriction)
- Goods and services for personal use
Exemptions
The following transactions are exempt from IVA:
- Financial services (banking, insurance)
- Educational services
- Healthcare services
- Real estate transactions (subject to SISA)
- Postal services
Penalties
- Late registration: Fines apply
- Late filing: Monthly penalties
- Late payment: Interest and penalties
- Incorrect returns: 30% of underpaid VAT