Zona Franca takes secretary of state and vice of Madeira to Brussels on Wednesday – The Economic Journal

Zona Franca takes secretary of state and vice of Madeira to Brussels on Wednesday - The Economic Journal

The Secretary of State for Fiscal Affairs and the Vice-President of the Regional Government of Madeira meet on Wednesday at the European Commission to respond to requests for information from Brussels on tax exemptions in the Madeira Free Zone.

The meeting was confirmed to Lusa by an official source of the Ministry of Finance, who stated that the meeting takes place "within the framework of the collaboration that the national entities provide in the process that takes place on the Madeira Free Trade Zone."

The European Commission has decided to initiate an in-depth investigation into the tax exemptions granted in the Free Zone of Madeira (ZFM) on the grounds that they may not comply with the rules applicable to State aid.

In a preliminary decision on the in-depth investigation published on 15 March, Brussels concludes "preliminarily that the scheme implemented by Portugal constitutes illegal aid which can not be considered compatible with the internal market".

In this context, it gave Portugal one month to present data, information and documents about the companies registered in the ZFM, the aid granted to them, the number of workers and the actual place of activity of these workers.

These data should be analyzed in the meeting that the Secretary of State for Fiscal Affairs, António Mendonça Mendes, and the vice president of the regional government of Madeira, Pedro Calado, will have on Wednesday in the Directorate General of Competition.

As the letter from Commissioner Margrethe Vestager refers to the Portuguese Government, the Commission wants to know specifically which companies registered in the ZFM between 2007 and 2014 and the amounts of aid received each year, who were the 25 largest beneficiaries in those years and the number of employees taken into account in accounting for the expected tax benefits.

Brussels also wants Portugal to provide proof of the actual location of the activity of the workers of all the companies selected in the sample during the control exercise to the ZFM for the years 2012 and 2013 and a complete list of all employees employed by a company registered in the Free Zone of Madeira for each year of the scheme, ie between 2007 and 2014.

Between 1987 (the year in which the free zone was created) and 2014, the European Commission approved several versions of the aid scheme to the ZFM under the Community provisions governing this type of aid.

In what was approved in 2007 (known as Regime III) for the period 2007-2013, it was decided that companies registered before 31 December 2013 can benefit from ZFM's tax advantages by the end of 2020.

The approved aid scheme for the ZNF aimed at attracting investment and job creation in the region and is reflected, in particular, in the granting of reductions in corporate income tax (IRC) with a focus on profits resulting from activities carried out in the region. Wood.

Reductions in Stamp Duty and exemptions from the tax on the onerous transmission of real estate due to the acquisitions of real estate destined to the installation of companies in ZFM are other benefits contemplated.

This process of monitoring the aid granted to undertakings established in the ZFM has already led to a number of exchanges of correspondence between Lisbon and Brussels without the information provided by the Portuguese authorities having succeeded in dispelling doubts.

The first answers were given by the previous Government, led by Pedro Passos Coelho.

Source link