Startrade Management

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.

Apart from stimulating the economy, this is an interesting development for companies licensed in the Free Trade Zone Madeira, especially for those selling to the final consumer by e-commerce. The reduction of VAT can translate into great savings and better competitiveness in the international marketplace.

By Ursula M. Hahn, Startrade Management, Lda.