Article 36-A of the EBF establishes a specific tax regime for entities licensed to operate in the Madeira Free Trade Zone (\u201cMFTZ\u201d).<\/p>\n
Among the conditions for accessing this regime, entities creating between one and five jobs are required to make a minimum investment of EUR 75,000 in tangible or intangible fixed assets during the first two years of activity.<\/p>\n
The recent ruling addresses precisely which assets may qualify for this purpose.<\/p>\n
The applicant was a company primarily engaged in providing IT consultancy services. It intended to acquire a passenger vehicle to be used exclusively in Madeira for business purposes, including professional travel and meetings with local entities, suppliers and clients.<\/p>\n
The question submitted to the Tax Authorities was whether the acquisition of this vehicle could qualify towards the minimum investment required under Article 36-A of the EBF.<\/p>\n
Since the EBF does not specifically define which assets qualify as eligible investment for these purposes, the Tax Authorities considered that the provision should be interpreted in conjunction with Commission Regulation (EU) No. 651\/2014 \u2014 the General Block Exemption Regulation (\u201cGBER\u201d) \u2014 given that the MFTZ regime constitutes regional State aid.<\/p>\n
Under this framework, eligible investment must relate to the creation or expansion of an economic activity and form a stable part of the productive structure of the establishment located in Madeira.<\/p>\n
The Tax Authorities considered that passenger vehicles are, by their nature, mixed-use assets which may objectively be used for both business and private purposes.<\/p>\n
Therefore, even where a company intends to use the vehicle for its managers’ business travel, meetings with clients or suppliers and other activities connected with its business, this does not, according to the Tax Authorities, eliminate the inherent possibility of private use.<\/p>\n
The Tax Authorities consequently concluded that, as a rule, a passenger vehicle does not meet the requirements to qualify as eligible investment for the purposes of Article 36-A(2)(a) of the EBF.<\/p>\n
The ruling is particularly relevant for companies licensed to operate in the MFTZ when planning investments intended to satisfy the requirements for accessing and maintaining the tax benefits available under the regime.<\/p>\n
The acquisition of an asset and its accounting recognition as a tangible fixed asset are not, in themselves, sufficient to ensure its eligibility. The nature of the investment, its connection with the economic activity carried out in Madeira and its stable integration into the company’s productive structure should also be assessed.<\/p>\n
Companies should therefore carefully review in advance the investments intended to meet the threshold established in Article 36-A of the EBF, particularly where the relevant assets may potentially be used for both business and private purposes.<\/p>\n
Belzuz Abogados, S.L.P.<\/a>‘s Tax Law Department<\/a> has extensive experience advising national and international companies and investors on tax incentives, investment structuring and special tax regimes applicable in Portugal and is available to assist with the assessment of the requirements for accessing and maintaining the tax benefits applicable to entities established in the Madeira Free Trade Zone.<\/p>\n","protected":false},"featured_media":9577,"template":"","categories":[514],"area-de-practica":[223],"publicaciones":[122],"idioma-publicacion":[71],"areas-practica-publicacciones":[],"class_list":["post-21788","publicacion","type-publicacion","status-publish","has-post-thumbnail","hentry","category-sin-categorizar","area-de-practica-fiscal-and-tax-law","publicaciones-miguel-paixao","idioma-publicacion-ingles"],"acf":[],"_links":{"self":[{"href":"https:\/\/belzuz.com\/en\/wp-json\/wp\/v2\/publicacion\/21788","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/belzuz.com\/en\/wp-json\/wp\/v2\/publicacion"}],"about":[{"href":"https:\/\/belzuz.com\/en\/wp-json\/wp\/v2\/types\/publicacion"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/belzuz.com\/en\/wp-json\/wp\/v2\/media\/9577"}],"wp:attachment":[{"href":"https:\/\/belzuz.com\/en\/wp-json\/wp\/v2\/media?parent=21788"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/belzuz.com\/en\/wp-json\/wp\/v2\/categories?post=21788"},{"taxonomy":"area-de-practica","embeddable":true,"href":"https:\/\/belzuz.com\/en\/wp-json\/wp\/v2\/area-de-practica?post=21788"},{"taxonomy":"publicaciones","embeddable":true,"href":"https:\/\/belzuz.com\/en\/wp-json\/wp\/v2\/publicaciones?post=21788"},{"taxonomy":"idioma-publicacion","embeddable":true,"href":"https:\/\/belzuz.com\/en\/wp-json\/wp\/v2\/idioma-publicacion?post=21788"},{"taxonomy":"areas-practica-publicacciones","embeddable":true,"href":"https:\/\/belzuz.com\/en\/wp-json\/wp\/v2\/areas-practica-publicacciones?post=21788"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}