 | | | | | Parent-Subsidiary Directive |
Council Directive 2011/96/EU, dated November 30 2011 (formerly Directive 90/435/CEE), regarding
a common system of taxation applicable to companies and subsidiaries for different Member
States, is fully applicable to companies in Madeira.
Through this Directive, the distribution of profits by a Portuguese company to companies in the
European Union (EU) is exempt from withholding at source, so long as:
- Both embody one of the legal forms of constitution provided for in the Appendix to
the Directive;
- Both are subject to Income Tax, without possibility of exemption;
- The parent company holds > = 10% of the shares in the subsidiary for at least 1
year.
Companies in Madeira comply with the first two requisites. If the 3rd is also fulfilled, it is
possible for entities in other Member States to pay dividends to a company in Madeira without
withholding at source.
The same exemption applies to relations between Madeira companies and European Economic Area
companies (Iceland, Liechtenstein and Norway).
Under article 15 of the Agreement between the EU and Switzerland, the exemption referred to
above is also applicable in the relations between Madeira companies and Swiss companies, where the parent company has a direct minimum holding of 25% in the company distributing the profits for at least two years.
| | |  | |
|
