Extension of Tax Benefits for Madeira’s International Business Centre Until 2028 - 2025 Portuguese State Budget

Benefits available until 31/12/2028

CIT

5% + 50% CIT deduction under certain circumstances[1]

WHT (dividends, interest, royalties paid to non-resident entities)

Exemption

VAT

Normal rate: 22%

Intermedium rate: 12%

Reduced rate: 5%

Stamp Tax

80% exemption on documents, contracts and other acts requiring public registration, provided they are carried out with entities not resident in Portugal or licensed in the IBCM

IMT & IMI

80% exemption on acquisitions of real estate intended for its installation, as well as other local taxes and fees

Custom Duties

For entities licensed in the industrial free trade zone, it should be noted that certain goods in the IBCM are considered not to be in the customs territory for the purposes of customs duties, quantitative restrictions and other charges or measures having equivalent effect, without prejudice to the application of provisions that may be adopted in exceptional cases. The same applies for VAT purposes, where payment of the tax is suspended

Benefits available until 31/12/2027

CIT

Exemption on interest from loans taken out by entities established in free zones, provided that:

(i)                  The proceeds are intended for the realisation of investments and the normal operation of the lenders, within the free zone, and

(ii)                The lenders are non-residents in Portuguese territory (with the exception of their permanent establishments located therein);

CIT & PIT

Exemption on income from the granting or temporary assignment, by entities not resident in Portuguese territory (with the exception of permanent establishments located there and outside free zones), of invention patents, operating licences, utility models, industrial designs and models, trademarks, names and insignia of establishments, manufacturing processes or conservation of products and similar rights, as well as those derived from technical assistance and the provision of information relating to a given experience in the industrial, commercial or scientific sector, provided that they relate to the activity carried out by the companies within the free zone;

Exemption on income from the supply of services obtained by non-resident entities and not attributable to a permanent establishment located in Portuguese territory outside the free zones, provided it is owed by entities established there and relates to the activity carried out there;

Exemption on income paid by offshore trust companies and branches established in the free zones to users of their services, provided these are entities established in the free zones or non-residents in Portuguese territory;

PIT

Exemption for crew members of ships registered in the international shipping register set up and regulated within the Madeira Free Trade Zone, or in the international shipping register to be set up and regulated under the same terms within the Santa Maria Free Trade Zone, in respect of remuneration earned in that capacity;

Stamp Tax

Exemption on the documents, books, papers, contracts, operations, acts and products foreseen in the General Stamp Duty Table relating to entities licensed in the Madeira and Santa Maria Free Zones, as well as the concessionaires companies of the same Free Zones, except when they have as interveners/recipients entities resident in Portuguese territory (with the exception of free zones, or permanent establishments of non-resident entities located there).