Madeira: Personal Taxation
Various deductions and offsets are allowed against income; the following are some of the main ones:
- There is a deduction from salary, maximum EUR3,400;
- Self-employment expenses are deductible, with various provisos;
- Rules for calculating commercial income are as for Corporate Income Tax;
- Expenses can be deducted from real estate income;
- There is a deduction from pensions;
- Some types of capital gain are abated by 50%, including real estate gains;
- There are dependent allowances, and deductions are permitted for some parts of health care costs, insurance premiums and education expenses;
- There is double taxation relief for international income;
- Some types of income from savings and investments are wholly or partly exempted from tax;
- Capital gains from shares held more than 12 months are exempt, but the ownership must be disclosed.
Portuguese individual income tax rules apply to individuals in Madeira. Income tax in Portugal is charged at progressive rates ranging from 11.5% to 46.5%.
For the tax years 2012 and 2013 income exceeding EUR153,300 is subject to a 2.5% solidarity surcharge.
Income tax and social security contributions are collected on a PAYE basis by employers on behalf of the government.
Tax returns must be filed annually by 15th March (employees), 30th April (self-employed and othes including non-residents).