Digitalised Services

DixcartNet.pt

DixcartNet.pt provides internet service facilities for international companies operating from the island of Madeira.

Dixcart offers a totally dedicated ISP and ASP infrastructure, which means that DixcartNet.pt clients are fully assured of their IT service supply. We also provide IT maintenance contracts which can remove the need for companies and clients to employ on-site IT specialists.

VAT on Internet Delivered Services within Europe

Location is an extremely important consideration, as sales of electronically delivered services are taxable.

Madeira is a highly relevant jurisdiction to consider for two types of vendor:

Non-EU Vendors

Since July 2003, registration in one of the member states of the EU has been required to enable VAT to be added to the cost of supply of digitalised services by non-EU vendors. VAT is charged based on the rules applicable in the customer's country. With a number of EU member states, different rates of VAT could technically be charged.

Enormous simplification can be achieved through the incorporation of a European subsidiary, and the registration of the subsidiary in one EU country. Financial benefits can be obtained from registering in a location where the VAT rate is at a relatively low level. Madeira provides one of the lowest rate (15%) locations in the EU and therefore offers vendors a competitive advantage over suppliers registered elsewhere.

The complication of a requirement to clarify the location of the customer within the EU may also not arise for a company incorporated in Madeira, as local Portuguese VAT regulations would apply and the entity would be regarded as a normal EU enterprise.

EU Vendors

Location of a subsidiary in Madeira will ensure that a vendor can charge one of the lowest rates of VAT in Europe, as opposed to higher rates applicable in other EU countries.

With Madeira increasingly being considered as a jurisdiction for the location of internet based corporations, the provision of reliable IT resources and services is absolutely essential.

Dixcart Data Centre Madeira

Dixcart has established a Data Centre in Madeira, which offers a secure environment for locating computer servers on the island.

With VAT at 14%, one of the lowest standard rates in the European Union, Madeira is the ideal location for a data centre providing digitalised services into Europe.

Since July 2003, all companies supplying digitalised services into and within the EU have been required to charge and account for VAT.

By forming a Portuguese subsidiary, licensed under the Free Trade Zone legislation of Madeira and using this to sell digitalised services throughout the EU, it is possible to charge VAT at the rate of 14% to all non-VAT registered individuals.

Companies registered in Madeira also enjoy additional tax saving opportunities. The Free Trade legislation enables companies trading from Madeira to pay a reduced rate of corporation tax until 2011. This rate varies from 3% down to 0%, depending on when the company was licensed and registered.

The Dixcart Data Centre Madeira enables clients to deliver digitalised services from Madeira to their customers around the world, it is managed by DixcartNet.pt, a Dixcart company dedicated to the delivery of Internet based solutions.