The government of Cabo Verde (Cape Verde) approved an agreement to avoid double taxation with Guinea-Bissau, aimed at preventing tax evasion and fostering economic relations between the two countries, according to an official statement issued following a Cabinet meeting.
The statement issued Friday said that the approved agreement, signed in July in Bissau and that will now have to be ratified by the Cape Verdean parliament, was part of “bilateral efforts to boost economic relations between the two brotherly countries.”
The statement pointed out that “to establish residence of a foreigner in another country implies that all of their income may be subject to taxation in the latter, generating double taxation when the same subject is also taxed in their country of origin.”
In the absence of harmonised international legislation, the statement said, “this undesirable situation” can only be overcome by signing conventions for the avoidance of double taxation, which allow for lower tax rates and generate greater competitiveness for taxpayers and businessmen.
The agreement to avoid double taxation was one of the points agreed by the two governments during the visit to Bissau last July by the Cape Verdean Prime Minister José Maria Neves, marked at the time by the signing of several agreements to relaunch and strengthen economic relations between the two countries. (macauhub/CV/GW)