The purchase of passenger vehicles cannot be counted as an eligible investment to access the reduced 5% corporate income tax (IRC) rate in the Madeira Free Trade Zone (ZFM). This clarification comes from a binding ruling published by the Regional Tax and Customs Authority of the Autonomous Region of Madeira (AT-RAM).
The decision, signed on July 17th and published on the Finance Portal, followed a request from a Madeira-based IT consultancy licensed to operate within the ZFM. AT-RAM concluded that, as a general rule, the acquisition of a passenger vehicle does not meet the legal requirements to qualify as an eligible investment.
Companies licensed in the ZFM benefit from a special tax regime approved by the European Union, allowing them to pay 5% IRC on profits from eligible activities, instead of the standard 13.3% rate. The amount of income qualifying for the reduced rate depends on job creation and maintenance in the autonomous region, and new businesses must meet a minimum investment requirement of €75,000 in tangible or intangible fixed assets within their first two years.
