Madeira: Double Tax Treaties

Madeira Double Tax Treaties

As part of Portugal, Madeira has access to the substantial number of tax treaties entered into by the mother country. Generally speaking, the treaty benefits are available to all Madeiran companies. However, Madeiran companies in the International Business Centre licensed under the Free Trade Zone Legislation are able to remit interest, dividends and royalties to non-residents without the imposition of withholding tax, so that treaty benefits in that instance are not needed.

The participation exemption available under the EU Parent/Subsidiary Directive No. 90/435 also overrides treaty benefits: any company in the EU owning 10% or more of another company and having done so for 1 year or since incorporation is able to receive income from it without the application of withholding tax. Among Madeiran companies, only the Mixed Holding Company is sometimes unable to take advantage of the Directive (because many countries consider that it does not pay enough tax).

See Withholding Taxes for details of rates chargeable for non-Free Trade Zone companies when there is no treaty.

At the time of writing, the following countries have double-tax treaties with Portugal (an * indicates that the treaty is under negotiation or awaiting ratification):

Algeria Austria Barbados* Belgium Brazil Bulgaria Canada Cape Verde Chile China Colombia Cuba Czech Republic Denmark Estonia Finland France Germany Guinea-Bissau* Greece Hong Kong* Hungary Iceland India Indonesia Ireland Israel Italy Japan* Kuwait* Latvia Lithuania Luxembourg Macao Malta Mauritius* Mexico

Morocco Mozambique Netherlands Norway Pakistan Panama* Poland Qatar* Romania Russia San Marino* Singapore Slovakia Slovenia South Africa South Korea Spain Sweden Switzerland Timor-Leste* Tunisia Turkey UAE* Ukraine United Kingdom Uruguay* USA Uzbekistan* Venezuela

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Madeira Table of Treaty Rates

This table lists the percentage rates of withholding tax on payments made from Treaty countries to Madeira and vice versa (at the time of writing). When two rates are quoted, the lower one applies to payments from a company in which the payee has a 10% participation - this is the usual level in OECD-model treaties.

Country	Interest		Dividends		Royalties
	Rcvd. in Madeira	Paid from Madeira	Rcvd. in Madeira	Paid from Madeira	Rcvd. in Madeira	Paid from Madeira
Algeria	15	15	10/15	10/15	10	10
Austria	10	10	15	15	5/10	5/10
Belgium	15	15	15	15	5	5
Brazil	15	15	15	15	10/15	10/15
Bulgaria	10	10	10/15	10	10	10
Canada	10	10	10/15	10/15	10	10
Chile	5/10/15	5/10/15	10/15	10/15	5/10	5/10
China	10	10	10	10	10	10
Czech Rep.	10	10	10/15	10/15	10	10
Denmark	10	10	10	10	10	10
Estonia	10	10	10	10	10	10
Finland	15	15	10/15	10/15	10	10
France	12	10/12	15	15	5	5
Germany	15	15	15	15	10	10
Greece	15	15	15	15	10	10
Hungary	10	10	15	15	10	10
India	10	10	10/15	10/15	10	10
Ireland	15	15	15	15	10	10
Italy	12.5/15	15	15	15	12	10
Morocco	12	12	10/15	10/15	10	10
Mozambique	10	10	15	15	10	10
Netherlands	10	10	10	10	10	10
Norway	nil	15	10/15	10/15	nil	10
Poland	10	10	10/15	10/15	10	10
Russia	10	10	10/15	10/15	10	10
South Korea	15	15	10/15	10/15	10	10
Spain	15	15	10	10/15	5	5
Sweden	10	10	10	10	10	10
Switzerland	10	10	10/15	10/15	nil	5
Turkey	10/15	10/15	5/15	5/15	10	10
United Kingdom	10	10	nil	10/15	5	5
USA	10	10	15	15	10	10
Venezuela	10	10	15	10	10	10/12

The treaties with Brazil and the USA exclude MIBC companies..

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