State Budget Law for 2023 includes new incentives for R&D, innovation and renewables
30 Dec 2022
Cape Verde published the State Budget Law for 2023 ( Law No. 16/X/2022) on 30 December 2022. It includes the following incentives:
• R&D tax incentives from 2023 to 2038 for qualifying resident corporate taxpayers, as well as permanent establishments of non-residents, which are allowed a deduction for R&D expenses at the following base and incremental rates, with any excess carried forward up to 10 years: (i) 40% of the expenses incurred in the tax period concerned, increased by 15% in case of taxpayers with less than two years of activity that do not benefit from the following incremental rate; (ii) 50% of the additional expenses incurred in the tax period concerned in comparison to the average expenses in the prior two years; and (iii) an additional 30% of expenses incurred in relation to R&D for ecological product design projects;
• A tax exemption on profits reinvested by technological companies authorized to operate in the Special Economic Area for Technologies and carrying out R&D activities, including: (i) companies that have invested at least 7.5% of the previous year's revenue in R&D; and (ii) companies with up to three years of activity, incubated in a certified incubator or an incubator recognized by Pro Empresa;
• An exemption from customs duties on the import of new and modern equipment and accessories for the production of renewable energy, including solar panels, wind generators, and other appliances able to produce energy based on renewable energy sources; and
• Additional 30% corporate income tax deductions for costs incurred inter alia for the acquisition of water and electricity
• A CVE 20,000 corporate income tax deduction for each trainee hired for at least 6 months and for each registered unemployed person hired for at least 12 months.
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Type:
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Promotion and facilitation (Investment incentives)
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Industry:
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