Madeira - Corporation Tax

In 2007 the European Commission approved extension of Madeira’s preferential tax regime until the year 2020. The new regime applies to new companies which are licensed and established in Madeira’s International Business Centre during the years 2007 to 2013.

Details of New Regime

Under the new regime, companies will benefit from a reduced corporate tax rate as follows:

2007 – 2009	- 3%
2010 – 2012	- 4%
2013 – 2020	- 5%

The appropriate corporate tax rate is limited to a maximum of a particular organisation’s annual taxable income dependant upon the number of jobs created in Madeira. Details of these figures are listed in the table below:

Job creation	Reduced Tax Rate applies to the following taxable income
1 - 2	€ 2 million
3 - 5	€ 2.6 million
6 - 30	€ 16 million
31 - 50	€ 26 million
51 - 100	€ 40 million
over 100	€ 150 million

Additional Tax Benefits

In addition to reduced corporate tax rates, new companies will continue to enjoy the following tax benefits until the end of the year 2020:

• Exemption from withholding taxes on the distribution of dividends, royalty and interest payments.
• Exemption from capital duty, notary and registration fees.

Existing Companies Licensed Before 2001

Existing companies licensed before the year 2001 will continue to enjoy full exemption from corporate tax until the end of the year 2011. From the year 2012 onwards the new tax regime will apply to these companies.