In addition to the innovations introduced by the State Budget, of which we highlight the new tax framework for crypto assets, Madeira recently approved its Regional Budget, implementing additional reductions in the tax burden on families and companies.
The Regional Legislative Decree no. 26/2022/M was published on 29 December 2022, approving the Autonomous Region of Madeira's Budget for 2023.
This is a Budget that maintains the Region's commitment to stability and attracting investment through a competitive tax environment, as is evident through the following measures:
- Maintenance of the general corporate income tax rate of 14.7% and reduced regional surcharge rates;
- Application of the IRC rate of 11.9% to the first 50,000 euros of taxable income of taxpayers who carry out an economic activity of an agricultural, commercial, or industrial nature and are qualified as a small or medium-sized company or a small mid-cap company
- IRC rate of 8.75% on the first €50,000 of taxable income of taxpayers who (i) carry on an economic activity of an agricultural, commercial or industrial nature, (ii) are qualified as a small or medium-sized company or a small mid-cap company, and (iii) carry on their activity in inland territories, classified and identified as such by the Regional Government under criteria such as emigration and ageing, economic activity and employment, entrepreneurship and territorial infrastructure;
- Maintenance of the IRC rate of 5% for companies in the International Business Centre of Madeira and the remaining tax benefits included in this regime;
- Updating the taxable income of the personal income tax brackets, as well as the rate of the 2nd bracket, maintaining the maximum 30% reduction permitted by the Regional Finances Law. This 30% reduction in the rates in mainland Portugal is extended to the 3rd and 4th brackets, impacting the remaining brackets by means of the average and progressive rate of the tax;
- Maintenance of all the advantages of the non-habitual resident tax regime;
- Maintenance of the participation exemption regime applicable to dividends and capital gains.
