Madeira Island VAT at only 14%

Madeira Island

Based on the successful reduction of Portugal’s deficit to 2.6% of GDP which puts the country in good standing with the financial guidelines of the European Union, the Government lowered the VAT for the country from 21% to 20%. In order to offset the special difficulties Madeira faces as a far away island, the VAT for the Autonomous Region Madeira is always 30% lower in comparison to the continent. Therefore, the island’s VAT rate was lowered from 15% – which is equal to the rate of Luxembourg – to 14%. This results in the lowest VAT rate in all of Europe.

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