The Madeira Regional Tax and Fiscal Affairs Authority (AT-RAM) has clarified that the purchase of light passenger vehicles cannot be counted as initial investment to benefit from the reduced Corporate Income Tax (IRC) rate of the Madeira Free Trade Zone (ZFM).
This understanding, approved by the regional director and published on the Finance Portal, was issued in response to an IT consulting firm licensed within the ZFM. The company sought to classify a vehicle, intended for operational support and professional travel, as an eligible investment.
The tax authority maintains that initial investment must consist of assets directly related to the economic activity and stably integrated into the production structure. Acquiring a passenger car generally does not meet these criteria, according to the regional tax administration, which references European regulations on regional investment aid.
