Madeira Decreased Reduced VAT Rate to 4%
Madeira Decreased Reduced VAT Rate to 4%, from former 5%. The measure will be effective in the Portuguese island from 1 October 2024.
Madeira decreased reduced VAT rate to 4%, from former 5%, effective from 1 October 2024. This measure is part of the tax relief policies adopted by the Regional Government, which seeks to alleviate the tax burden on citizens and promote consumption.
The reduction of VAT to 4% represents the maximum limit allowed by the Law. The measure was published in the Budget Law for 2024, however, to ensure a smooth and effective transition and the proper adjustment of the billing systems of economic operators, the new VAT rate takes effect as of October 2024.
Have a look at our VAT rates in Europe overview.
It is important to highlight that this VAT reduction will only apply to those goods or services that were previously at the 5% reduced rate, and 6% in Portugal. Among the products that will see this reduction reflected are:
- Certain food products: They include meat preparations, bakery products, canned fish (excluding certain types), dairy products, and a variety of oils and sugars. For example, yogurts, butters, and certain types of cookies.
- Other Products: Products such as newspapers, learning materials, books and periodicals of a cultural and educational nature.
- Certain services, such as passengers transport, or the rental of gas and electricity meters.
Find here the official Budget 2024 for Madeira.
Find here the full list of products and services at reduced VAT rates in Portugal. Also, take a look at other recent changes in Portuguese VAT rates.