Portuguese Government formalizes the extension of Madeira's Tax Regime until 2020

Funchal, 18th of January 2008 - The Portuguese Government has published today Decree Law n.º 13/2008 which ads Article 34-A to the Statute of Tax Benefits. This article regulates the extension of the preferential tax regime of the IBC of Madeira until the year 2020.

According to Article 34-A, new companies licensed from January 2007 to December of 2013 will enjoy reduced corporate tax rates of 3% between 2007 and 2009, 4% between 2010 and 2012 and 5% between 2013 and 2020. These new companies shall remain totally exempt from withholding taxes on dividends and royalty payments, as well as from capital duty until 2020. In order to enjoy these tax benefits, these new companies will be required to have at least one employee.

Companies licensed to operate within Madeira's International Business Centre before the year 2001 will continue to benefit from a full exemption from corporate tax until the end of 2011, as well as from withholding taxes on dividends, royalty payments and capital duty. As of 2012, such companies will fall under the new regime which shall be valid until the year 2020.