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Now that the conditions for the bailout to Portugal have been made public through a memorandum of understanding signed between the European Commission, IMF, the ECB and the Portuguese Government, it is vital to know what the impact is on the International Business Centre of Madeira.
Our purpose is to inform you about the content of this memorandum and to inform that no provision is foreseen for the amendment to the tax benefits granted to entities licensed to operate within the International Business Centre of Madeira.
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THE IMPACT OF PORTUGAL BAILOUT CONDITIONS ON THE INTERNATIONAL BUSINESS CENTRE OF MADEIRA
Now that the conditions for the bailout to Portugal have been made public, it is vital to know what the impact is on the International Business Centre of Madeira.
Some of the measures will have a direct impact on the Autonomous Regions, both in terms of income taxes as in consumption taxes. In this sense, changes are foreseen to the Regional Finance Law to limit the reduction of tax rates in force in the Autonomous Regions to 20% of the rates in force on Continental Portugal.
These measures are still in need of legislative approval, however, from the entire document, one can conclude: ALL TAX BENEFITS GRANTED TO ENTITIES LICENSED TO OPERATE WITHIN THE INTERNATIONAL BUSINESS CENTRE OF MADEIRA ARE NOT CHANGED. In fact, all entities licensed to operate within the framework of the International Business Centre of Madeira will not see their tax benefits changed. This means that the reduced corporate tax rates (0% to companies of the former regime and 4% - 5% for the others), exemptions on withholding taxes and other benefits applicable to entities licensed will not be affected.
Moreover, the main Portuguese political parties mention their intention to support and improve the competitiveness of the tax system of the International Business Centre of Madeira, in the forthcoming elections in June.
To read the memorandum of understanding signed between the European Commission, IMF, the ECB and the Portuguese Government, under the European Financial Stabilization Mechanism, click here:
memorandum.
New Madeira, an independent corporate service provider with a vast experience attracting inward foreign investment to Madeira, has provided all professional services related to the evaluation, implementation and management of business-related structures in the International Business Centre of Madeira, since 1990.
Please feel free to consult our website at www.newmadeira.com.
Should you require further clarification on the above or to discuss any other specific structure, do not hesitate to contact us.
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