On Friday 6 July, the European Commission opened an in-depth investigation into tax exemptions granted to companies in the free zone of Madeira. This aid regime may have been applied in a way that was not consistent with the Commission's decisions of 2007 and 2013 concerning the said regime.
The decision was made following a preliminary examination of the application of the tax aid regime carried out by the Commission in the framework of the standard control. Further to this examination, the institution had concerns that the application of this regional aid regime was out of keeping with its decisions of 2007 and 2013 (see EUROPE 9457).
In particular, the Commission is questioning compliance with two requirements: the creation of jobs in the region by the beneficiary companies of the aid regime and the fact that the profits of these companies are generated only by activities carried out in Madeira.
The aid regime in the free zone of Madeira, which ran until 2014, consisted of a reduction of the corporate tax rate and other tax breaks seeking to attract investment and create jobs.
In the framework of the in-depth investigation, both Portugal and interested third countries may submit their observations. (Original version in French by Carmen Garcia, intern)