Beyond income tax, Madeira’s autonomy makes everyday life and business structurally cheaper — by law, not promotion.
VAT. Madeira applies 22% standard, 12% intermediate, and 4% reduced — against the mainland’s 23/13/6. (The reduced rate dropped to 4% in October 2024; you will still find outdated sources citing 5%.) One point on every restaurant bill and renovation invoice sounds small; across a household’s year, and across a construction project’s budget, it is not.
CORPORATE TAX. Madeira’s general IRC rate is 13.3% for 2026 — the mainland pays 20%. Small and mid-cap companies enjoy a lower rate on the first €50,000 of taxable income. And for qualifying international activity, the Madeira International Business Centre (MIBC) licenses companies at 5% — one of the lowest corporate rates in the European Union, guaranteed in its current framework through 2033.
WHAT THIS MEANS IF YOU ARE MOVING A LIFE OR A BUSINESS. The stack is the story: reduced personal income tax (previous article), reduced VAT on what you spend, 13.3% — or 5% — on what your company earns, inside the EU, in the Schengen area, an hour and forty-five minutes from Lisbon. Few places in Europe combine all four.