Madeira is an autonomous region of Portugal. National tax law applies, and the regional government can adjust some rates. That is why a Madeira company can pay different rates from an identical company in Lisbon.
The main taxes
- Corporate income tax (IRC). Paid on profits. For 2026 the Madeira rate is 13.3%, down from 14%. Qualifying small and medium-sized companies and small mid-caps that carry on an agricultural, commercial or industrial activity pay 10.5% on the first €50,000 of taxable profit and 13.3% on the rest. Both come from Regional Legislative Decree 8/2025/M (the 2026 regional budget). A regional surcharge (derrama) may apply on top. The rates are set each year, so check the next budget.
- Value added tax (IVA). The Madeira rates are lower than the mainland ones. The Tax Authority’s December 2024 circular lists 4% (reduced), 12% (intermediate) and 22% (normal) for Madeira, against 6%, 13% and 23% on the mainland. Reduced rates apply to specific goods and services; the circular and the VAT Code say which.
- Municipal property tax (IMI) and transfer tax (IMT). Relevant when your business owns or buys property.
- Withholding taxes on payments such as salaries, rents and certain services.
Regimes worth knowing
- Madeira International Business Centre (MIBC). A separate, licensed regime with reduced corporate tax for qualifying companies. See the MIBC guide.
- Simplified regimes for small businesses may apply to sole traders and very small companies. An accountant can tell you whether you qualify.
Practical points
- Companies file periodic VAT returns, annual IRC returns and the annual company information (IES), and issue invoices through certified software.
- Missing deadlines carries penalties, so most companies use a certified accountant, which is also a legal requirement.
- Sector rules and local surcharges exist. Always check the current year.
Figures in this area change with every regional and national budget. Treat this guide as a map of what to ask, and confirm numbers at the sources below.
Official and primary sources
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