IV Regime - Main Features
» Full integration within the EU legal framework;
» IBC companies can freely access the EU market;
» E.U VAT system is fully applicable and Madeira IBC companies are automatically registered for VAT in the European Union with number validated at VIES
» European Directives apply to Madeira;
» Subject to the EU initiatives on tax harmonization;
» Regime of benefits authorized by the European Commission;
» Wide network of Double Tax treaties (app. 70).
Approved Regime of Benefits: Madeira IBC companies benefit from a reduced corporate income tax rate of 5%. The reduced corporate tax rate applicable is limited to a ceiling linked to the annual taxable income, which varies and is dependent on the number of jobs created as follows:
| Job creation | Reduced Tax Rate applies to the following taxable income |
|---|---|
| 1 -2 | € 2,73 Million |
| 3 - 5 | € 3,55 Million |
| 6 - 30 | € 21,87 Million |
| 31 - 50 | € 35,54 Million |
| 51 - 100 | € 54,68 Million |
| over 100 | € 205,50 Million |
The application of the reduced corporate income tax rate will also imply the fulfilment by the Company of a minimum investment of € 75.000,00 euros within the first 2 years of activity. Such requirement, however, is waived if the Company creates 6 or more jobs within the first six months of activity.