In March 2015, the European Commission extends the tax benefits of the
Madeira Free Zone (MFZ) until 2027.
The new regime maintains the current regime’s conditions regarding to
profit bands, investment, job creation, and allowed activities, as well as the
5% income tax.
Madeira´s regulatory authorities (Sociedad para el Desarrollo de Madeira)
has indicated that the new regime introduces, among others, no withholding tax
on dividends payments, only when effective headquarters and management are not
in Portugal (except for MFZ) nor in a tax heaven.
The tax benefits will be limited to the application of one of the
following:
• 15,1% of business turnover,
• 20,1% of GVA (gross value added), or
• 25,1% of the labor mass.
However, the Portuguese Government still has to approve the proposal sent
by Madeira’s authorities.