Income and Taxes: Fiscal Aspects for Those Renting an Apartment in Cape Verde
If you rent out an apartment you own in Cape Verde, you must consider taxation both at the local level (in Cape Verde) and potentially in your country of tax residence. Here’s what you need to know.
In Cape Verde, rental income is subject to taxation. The main taxes you may need to pay include:
✔ Personal Income Tax (IRPS - Imposto sobre o Rendimento das Pessoas Singulares): If you rent the apartment as a private individual, rental income is subject to IRPS, with a tax rate that varies based on earnings. In some cases, you may opt for a flat tax of 10% on rental income.
✔ VAT (IVA - Imposto sobre o Valor Acrescentado): If you rent the property with additional services (e.g., similar to a tourist rental or B&B), you may be subject to Value Added Tax (VAT).
✔ Municipal Tax (IUP – Imposto Único sobre o Património): This is a property tax that must be paid annually.
You must register the rental contract with the Cape Verdean tax authorities and declare your rental income.
Taxes in Your Country of Tax Residence
If you are a tax resident in another country (e.g., Italy), you may also need to declare your rental income there. For example, in Italy:
✔ Income Tax Declaration: You must declare foreign rental income in the RW section of your tax return and pay taxes according to Italian regulations.
✔ Tax Credit: To avoid double taxation, you can deduct the taxes already paid in Cape Verde.
Double Taxation Agreements
Cape Verde has signed treaties with some countries to prevent double taxation. Check if your country has an agreement with Cape Verde to deduct local taxes paid on rental income.
If you want to manage everything correctly, we take care of everything, transforming your property into a secure and profitable source of income.
