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capital duty
| Under the favourable tax system, companies based in Madeira are exempt from paying stamp or capital duty on capital contributions made by shareholders non-resident in Portugal, even if residing in tax havens, which is not the case with other European tax havens. |
Accordingly, a company based in Madeira is frequently inserted between a shareholder residing outside of the European Union and a holding located in the European Union, in order to avoid tax payments on capital contributions made by the shareholder to the holding and also to avoid deducting tax at source on the payment of income (dividends, interest, income from company liquidation and other income) to the shareholder. Without the intermediary company in Madeira, these payments would be heavily taxed. |
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