Madeira Free Trade Zone keeps 5% corporate tax rate under new regime
Madeira GuideThe Regional Government welcomed a national decision that keeps the low tax rate for Free Trade Zone companies and adds stricter job and activity rules.
Portugal's Council of Ministers has approved a draft law that authorises the government to set up a new tax regime for companies in the International Business Centre of Madeira, known as the Madeira Free Trade Zone. The regime keeps the reduced corporate income tax (IRC) rate of 5%.
It applies to companies licensed between 1 January 2027 and 31 December 2033 and has effect until 31 December 2037. It succeeds the current regime, which ends at the end of this year. According to JM Madeira, the 5% rate for companies licensed under the current regime had already been extended to 31 December 2033.
The new regime keeps 80% exemptions from stamp duty, IMI, IMT and the regional and municipal surcharges. Ships in the International Shipping Register of Madeira (MAR) are fully exempt from stamp duty on related acts, and their crews pay no personal income tax (IRS).
Activities that meet at least two listed requirements can deduct 50% from the tax due. The requirements include modernising and diversifying the regional economy, innovation and research, better environmental conditions, and at least 15 jobs kept for five years.
The regime also tightens the rules on real economic activity in the region and the controls on it. A company must create at least one full-time job in Madeira within its first six months of activity and keep one full-time job in every tax year.
The Regional Government welcomed the approval in a statement on 6 November, a day after the Council of Ministers vote.
In July this site reported on a new framework for the Free Trade Zone agreed with the European Commission.
Sources
Madeira Guide
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