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It was recently published some legislative changes, namely the simplification on mergers and split-up regime, the regulation on issuing rulings and changes to the rules of location of services for VAT purposes.
The purpose herewith is to let you know of these changes, that increase of Madeira’s International Business Centre’s competitiveness, as well as its capacity to attract foreign investment.
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RECENT LEGISLATIVE CHANGES
Decree Law 185/2009 – Simplification on mergers and split-up regime
The Decree Law 185/2009, dated 12th of August, reflects the Directive 2006/46/CE from the European Parliament and the Council dated 14th of June, adopting measures to simplify mergers and the split-up regime, which may be essential not only to the restructure of companies and to an increase of its competitiveness, reducing the respective direct administrative costs. Also determines that several procedures should be undertaken electronically and that the time for the reply of administrative entities would be reduced.
Decree Law 186/2009 – Changes to the rules of location of services for VAT purposes
The Decree Law 186/2009, dated 12th of August, reflects the Directives 2008/8/CE (its article number 2) and 2008/9/CE dated 12th of February 2008, as well as the Directive 2008/117/CE dated 16th December 2008, all from the Council, related to the VAT common system, changing essentially the rules of location of the services provided, namely transnational ones.
With this Decree Law, a simplified reimbursement system for taxpayers, who support VAT in another EU member States, is created. Therefore the reimbursement request is made electronically at the State where it is established and must be decided within 4 months, as long as there are no additional information requests.
Other measures of administrative simplification where also put in place, for example the suppression of the obligation to deliver a summary annual statement on distance sales.learn more
The new rules of location of services provided, effective from the 1st January 2010, are simplified, now having 2 general rules, having in mind the nature of the costumer. If the customer is an individual (B2C), the operations are located at the place of the head office, establishment or domicile of the provider. Instead, if the customer is a VAT subject (B2B), the operations are located where the customer has its head office, establishment or domicile (reverse charge).
It should be referred that the existing rules for electronic commerce (B2C) have not been changed, continuing to benefit from the lowest VAT rate in Europe: 14% in Madeira.
Obviously, these 2 general rules involve a number of exceptions, as for example the services provided related to real estate, which will be located where they are physically carried, regardless the nature of the customer. Another exception is when the service provider is domiciled in Portugal and the customer established in a non EU country, where the assignment or grant of copyright, licenses, trademarks and other similar rights will not be taxed in Portugal, for VAT purposes.
But there are other exceptions and New Madeira can help you locating the provision of your business services, enabling you to benefit from Madeira’s preferential tax regime in an optimal way.
Administrative Rule 972/2009 – Regulation on issuing Rulings
The Administrative Rule 972/2009, dated 31st of August, regulates the terms on how the request for a Ruling from the Tax Administration should be done, reducing the time for the Tax Administration to decide and establishing the procedures to follow on presenting such requests.
It should be noted that the Tax Administration has now 90 days, from the date of the request, to notify its decision, a period which can be reduced to 60 days if the request is submitted with an urgent nature.
According to our experience, Rulings in Madeira can be obtained in a fairly quick time, not taking, in some cases, longer than 2 to 3 weeks.
New Madeira, an independent corporate services provider with a vast experience attracting inward foreign investment to Madeira, provides since 1990 all professional services related to the evaluation, implementation and management of business-related structures in the International Business Centre of Madeira.
Please feel free to consult our website at http://www.newmadeira.com.
Should you be interested in obtaining further clarifications on the above or in discussing any other specific structure, do not hesitate to contact us.
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