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5.4. Tax Base for Non-Resident Entities

Non-resident entities operating in Cape Verde through a permanent establishment  are subject to tax on a territorial basis i.e., on income sourced from Cape Verde.

Non-resident entities deriving income from sources in Cape Verde without having a permanent establishment therein are subject to withholding tax on their income (see Sec. 8.2.2. below for tax rates).

Capital gains derived by non-resident entities without a permanent establishment in Cape Verde from the disposal of real estate, shares, and other securities, are subject to tax at a reduced rate. In general, the tax due is paid through withholding tax (see Sec. 8.2.2.).

Capital gains derived from the sale of shares or other equity instruments by non-resident entities with or without a permanent establishment in Cape Verde are exempt from corporate tax if such shares/ instruments were held for a period of 12 months or more. The exemption does not apply if the shares are in entities benefiting from a favourable tax regime. Further, the exemption does not apply to capital gains arising from the transfer of shares of a company in which more than 50% of the assets directly or indirectly consist of real estate located in Cape Verde.