COVID_19

Getting to Madeira amidst COVID-19

The Government of the Autonomous Region of Madeira (RAM) has defined, in relation to the Standardization Plan for Air Accessibility, to be in force as of July 1, with regard to travelers to the airports of Madeira and Porto Santo:

  1. Filling out and submitting the epidemiological survey
    Survey in portuguese: http://apps.iasaude.pt/s-alerta/questionarios/viagem/questionario.cfm?l=PT
    Survey in other foreign languages: http://apps.iasaude.pt/s-alerta/questionarios/viagem/

All passengers must complete the Regional Health Authority’s (IASAÚDE) form.

The form should be filled in previously to the trip, between 48 and 12 hours before departure.

The survey is available at the Regional Health Authority’s website and, will also be accessible through airlines’ websites that so consent.

Alternatively, the completion of the survey, on paper, may occur on arrival at airports in the Autonomous Region of Madeira.

  1. Thermal Screening

All passengers landed at airports in Autonomous Region of Madeira are subject to thermal screening, even if they carry a negative test for COVID-19 disease, carried out within 72 hours prior to landing, in laboratories certified by national or international authorities.

  1. COVID-19 disease test

Each traveller who disembarks at the airports of the Autonomous Region of Madeira is obliged to alternatively fulfill, and under the supervision and guidance of the competent health authorities, that which is established in one of the following paragraphs:

  1. a) Provide proof of having performed a PCR test to screen for SARS-CoV-2 with a negative result, provided that it is carried out within a maximum period of 72 hours prior to disembarkation;
  2. b) Conduct, through the collection of biological samples upon arrival, a PCR screening test for SARS-CoV-2, to be carried out by the health authority, and remain in isolation, in the respective home or in the intended accommodation establishment, until obtaining a negative result from the test.
  3. c) Carry out voluntary isolation, for a period of 14 days, at your home or at the accommodation establishment where accommodated, and if the accommodation period is less than 14 days, the confinement will have the duration of the accommodation period.
  4. d) Return to the destination of origin or any other destination outside the territory of the Autonomous Region of Madeira, fulfilling, until the time of the flight, isolation at home or in the accommodation establishment where accommodated.

3.1. The PCR screening tests for SARS-CoV-2 considered for the purposes of paragraphs a) and b) are those certified by national authorities and recommended by international health authorities, the European Centre for Disease Prevention and Control (ECDC) and the World Health Organization (WHO);

3.2. The financial costs incurred at the Hotel where the traveller is accommodated, in the cases referred to in paragraphs b) and c) of number 3 are the responsibility of the traveller alone.
Criteria for submission to the SARS CoV2 test in childhood and pre-adolescence:

  • Children from 12 years old, subject to prior decision by the Health Authorities;
  • Children with suspect criteria for COVID 19 disease;
  • Children whose family members or companions are suspected cases;
  • Other situations validated by the Health Authorities.
  1. Monitoring

All passengers will be monitored through an APP (mobile application) “Madeira Safe to Discover” of the Regional Health Authority, of voluntary, but recommended use, or by telephone contact.

  1. Positive test result for COVID-19 disease

Mandatory confinement, if necessary compulsively, for a period of 14 days, in a health establishment, in the respective home or in an accommodation establishment, by decision of the competent health authorities:

a) For patients with COVID-19 and those infected with SARS-CoV-2;

b) For citizens for whom the health authority or other health professionals have determined active surveillance.

  1. Repatriation

The Government of the Autonomous Region of Madeira collaborates with all Diplomatic Authorities and Operators involved.

All charges related to repatriation operations must be covered by passengers’ travel insurance.

Travellers between Madeira and Porto Santo are currently free from any control by Health authorities.

The Regional Government of Madeira, through the Regional Secretariat for Tourism and Culture, and Madeira Promotion Bureau are working side by side with all stakeholders to relaunch the Destination. Our teams are always available to share information.

​Therefore:

  • We advise that contacts be made with the respective airlines, tour operators, or travel agents to adjust returns.
  • The Archipelago ports’and marinas are closed.

Madeira was the first region in Portugal to implement a “Contingency Plan for Emerging Infections: Coronavirus”, presented on 03 February 2020, a document that is subject to continuous updates.

Link (download): Plano de Contingência para Infeções Emergentes: COVID-19 da RAM  (Contingency Plan for Emerging Infections: Coronavirus – COVID 19  in Madeira Islands) – portuguese version

Please consult the poster with health recommendations regarding Coronavirus – COVID 19: https://covidmadeira.pt/

For more information, browse the IASAÚDE microsite for regular updates at : https://covidmadeira.pt/

For more information on which countries have not been blocked from flying to Portugal, please consult the IATA’s website.

Source: VisitMadeira

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Switzerland

The best of both worlds

In international taxation one can seldomly have the best of both worlds. However, Portugal is proving otherwise, thanks not only to the Madeira International Business Centre, but also to the Non-Habitual Resident (NHR) tax regime.

Created in September 23rd, 2009, the NHR regime is a set of personal income tax exemptions and reduced rates aimed at people wishing to transfer their residence to Portugal. Those qualifying for the NHR regime are entitled to the above-mentioned reduced rates for a period of 10 consecutive years.

Among the several tax benefits deriving from the NHR regime, is the tax exemption on foreign sourced income (interests, dividends, capital gains, income from real estate property (rents), royalties, intellectual property income and business income) provided that: these latter types of income can be taxed in the country of origin under a Double Taxation Agreement signed with with Portugal.

Given the above, potential investors with structures in Malta or Switzerland can relocate to Portugal and have peace of mind with respect to dividends/profits distributed by Maltese and Swiss companies (such as a SICAV type company – investment company with variable capital) to their shareholders benefiting from the NHR scheme.

In fact, the Portuguese Tax and Customs Authority not only applies full tax exemption on income received from the above entities (as generally foreseen in the Portuguese Personal Income Tax Code), but has also established recently binding information to its taxpayers that dividends paid to NHR shareholders of Maltese companies and SICAVs are exempt from personal income tax in Portugal.

In the light of the Double Taxation Treaty concluded with Malta in Portugal, the tax credit provided to shareholders is assimilated to dividends, taking into account the specificity of the Maltese tax system of imputing income to shareholders.

On the other hand, and although the Portuguese Personal Income Tax Code considers the income paid by a collective investment organization, namely a SICAV, to its participants, is as capital income, in light of the Double Taxation Treaty between Switzerland and Portugal, the same income is considered as dividends.

Further to the above, the same treaty establishes a situation of cumulative tax jurisdiction for this income, with Portugal being able to exercise taxation as the State of residence of the beneficiaries, and Switzerland, as the State of the source. Therefore, under the NHR regime, income deriving from SICAVs will be exempt from taxation in Portugal.

The NHR as a stand-alone option, or together with the corporate tax incentives under the Madeira International Business Center, makes available to international investors. a higher degree of international mobility and liquidity, the latter through a low corporate tax rate of 5% applicable to international services companies.

These features of the Portuguese Tax System make it possible for one to benefit from the best of both worlds.

auctor Miguel Pinto-Correia

MCS and its team have more than 20 years of experience in assisting private clients who want to transfer residence or invest in the Autonomous Region of Madeira.

Obtaining RNH status requires a careful assessment of the income structure of the potential beneficiary.

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Taxation of Foreign Pensions

It is increasingly common for expats to come and spend their retirement in Madeira Island, Portugal. They bring with them not only their savings of a lifetime of work, but also their foreign pensions.

Fulfilling the criteria of tax residence in Portugal (residing more than 183 days in Portuguese territory, or, when residing less time, having a house here that can be occupied at any time in the same period of time), those who reside, for tax purposes, in Portugal, are subject to the legal obligation to annually report their foreign bank accounts and their worldwide earnings to the Portuguese Tax and Customs Authority.

It is therefore important to understand the taxation framework of foreign pensions that tax residents in Portugal are subject to.

According to the OECD Model Convention, to which most countries and territories adhere, in order to avoid double taxation “pensions and similar remuneration paid to a resident of a contracting State [in this case Portugal] as a result of previous employment can only be taxed in that State [Portugal]”. In other words, foreign pensions earned by tax residents in Portugal can only be, in most cases, taxed in Portugal.

Notwithstanding the previous paragraph, “pensions and other similar remuneration paid by a contracting State or by its political subdivision or local authority, either directly or through funds, constituted by them, to a natural person, as a result of services rendered by that person to the State, or its subdivision or municipality, can only be taxed in that State.” That is to say, foreign pensions paid to former civil servants can only be taxed by the State where the former civil servant has performed his duties.

Note, however, that the overwhelming majority of expats who come to live to Portugal will be receiving pensions derived from previous commercial or industrial activities, this means that under the law, their pensions in Portugal will be subject to progressive rates of up to 48%.

The only way to avoid such high taxation on pensions by obtaining the status of Non-Habitual Resident (NHR), which must be requested by the taxpayer on arrival in Portugal (provided that the conditions are met). Beneficiaries of the NHR regime thus have their foreign pensions subject to a fixed rate of 10% on earned pensions from foreign sources.

In addition to the benefits described above, beneficiaries of the NHR scheme may also benefit from exemptions and reduced personal income tax rates on other types of income for a period of 10 consecutive years.

auctor Miguel Pinto-Correia

MCS and its team have more than 20 years of experience in assisting private clients who want to transfer residence or invest in the Autonomous Region of Madeira.

Obtaining RNH status requires a careful assessment of the income structure of the potential beneficiary.

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Tributação de Pensões Estrangeiras

É cada vez mais frequente emigrantes portugueses retornarem a Portugal após uma vida de trabalho no estrangeiro, à semelhança do que vários expatriados pensionistas fazem. Consigo trazem não só as poupanças de uma vida de trabalho, mas também as suas pensões estrangeiras.

Cumprindo os critérios de residência fiscal em Portugal (residir mais de 183 dias em território português, ou, residindo menos tempo, possuindo cá uma casa que possa ser ocupada a qualquer momento no mesmo período de tempo), aqueles que residem, para efeitos fiscais, em Portugal ficam sujeitos à obrigação legal de reportar anualmente as suas contas bancárias estrangeiras e os seus rendimentos mundialmente auferidos à Autoridade Tributária e Aduaneira.

Importa, por isso, perceber o enquadramento fiscal das pensões estrangeiras por residentes fiscais em Portugal.

De acordo com a Convenção Modelo da OCDE, à qual a maioria dos países e território adere, com o intuito de evitar a dupla tributação, “as pensões e remunerações similares pagas a um residente de um Estado contratante [neste caso Portugal] em consequência de um emprego anterior só podem ser tributadas nesse Estado [Portugal]”. Ou seja, as pensões estrangeiras auferidas por residentes fiscais em Portugal só podem ser, na generalidade dos casos, tributadas em Portugal.

Não obstante o parágrafo anterior, “pensões e outras remunerações similares pagas por um Estado contratante ou por uma sua subdivisão política ou autarquia local, quer directamente quer através de fundos, por eles constituídos, a uma pessoa singular, em consequência de serviços prestados a esse Estado ou a essa subdivisão ou autarquia, só podem ser tributadas nesse Estado.” O mesmo é dizer que, pensões estrangeiras pagas a antigos funcionários públicos só podem ser tributadas pelo Estado onde o antigo funcionário público tenha exercido as suas funções.

Ora, caindo, a esmagadora maioria dos expatriados e emigrantes que retornam, no primeiro caso (i.e.: auferirem pensões por via de actividades comerciais ou industriais) quer isto dizer que ao declararem, conforme exigido por lei, as suas pensões em Portugal as mesmas estarão sujeitas às taxas de IRS progressivas que podem ir até aos 48%.

A única forma de evitar tão elevada tributação sobre as pensões estrangeiras é através do estatuto de Residente de Não-Habitual (RNH), o qual deverá ser requerido pelo contribuinte aquando da sua chegada a Portugal (desde que reunidas as condições para beneficiar do mesmo). Os beneficiários do regime RNHs vêem assim as suas pensões estrangeiras sujeitas a uma taxa fixa de 10% sobre as mesmas.

Para além dos benefícios descritos acima, os RNH podem ainda beneficiar de isenções e de taxas de IRS reduzidas sobre outros tipos de rendimentos por um prazo de 10 anos consecutivos.

auctor Miguel Pinto-Correia

A MCS e a sua equipa contam com mais de 20 anos de experiência na assistência a clientes privados que pretendem transferir residência ou investir na Região Autónoma da Madeira.

A obtenção do estatuto de RNH exige uma cuidada avaliação da estrutura dos rendimentos do potencial beneficiário.

 

 

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Reconversion of Local Accommodation

In recent years Portugal has been considered a safe haven for several expats and foreign investors, who in turn have contributed on a large scale to the improvement of the Portuguese economy, by investing in the real estate sector, sometimes simultaneously associated with the tourism sector, namely in local accommodation (short terms tourist rentals, known in Portugal as alojamento local), or because many wish to relocate  their life and busines activity, permanently, to the country.

Several programs were launched to attract these investors and expats, including programs with attractive tax benefits such as the Non-Habitual Resident (NHR) regime, or the   “Golden Visa“, a residence by investment program of which most of the investments were  made  through the acquisition of real estate property.

In recent years, these programs have led to an exponential increase of real estate acquisition, especially in large urban and tourist areas, which has also contributed emphatically to the growth of the tourism sector, since a  large percentage of real estate acquisition has been  allocated to local accommodation.

Despite the crisis arising from the pandemic outbreak of Covid-19, the “Golden Visa” maintains a good level of adherence and demand by investors. In May of this year, there was a new increase in the value of real estate investment, a total of 137 million euros, the highest monthly investment value since March 2017.

Despite the message of confidence passed on by investors during the crisis, the global pandemic has exacerbated some socio-economic effects that were already worrying the Portuguese government, especially housing in large urban areas.

The strong demand for profitable properties, under the “Golden Visa” program, coupled with the growth of tourism activity in Portugal, and consequently the growing investment in local accommodation, has aggravated the price of housing rentals, especially in the large urban centers where the majority of real estate investment is made, and where the highest percentages of local accommodation.

On June 6, 2020, Resolution of the Council of Ministers No 41/2020 was published, approving the Economic and Social Stabilization Program, which contains measures for the conversion of local accommodation.

There is great uncertainty as to the direction of the tourism sector, how and when it will rise and how the sustainability of housing prices and rentals will be in these times of pandemic. Tourism has held back its breath, and those who have invested in local accommodation may need an oxygen balloon in the short-term.

In view of the urgency of responding to the middle-income population in obtaining affordable housing leases and the fact that the tourism sector, in particular local accommodation, is experiencing major difficulties due to restrictions on international travel, the measure of reconversion of local accommodation could be a response in order to combat both problems.

The measure itself is implemented through the Portuguese government’s support to municipal rental and sub-rental programs for more affordable rents. In these programs public entities pay 50% of the difference between the rental income paid and the rental income received, which will certainly give increased security to the landlord, because 50% of the income is guaranteed by public entities.

To the above benefit there is also an important advantage concerning personal income tax and corporate income tax exemption, on rental income resulting from the lease or sub-lease, as stipulated by Article 20 of Decree-Law No. 68/2019.

This option concerning the conversion of local accommodation into long term rentals may be even more appealing, considering the amendment to Article 3(9) of the Personal Income Tax Code, carried out by the 2020 State Budget. Such change foresees that the local accommodation does not generate a capital gain when the property is transferred back to the owner’s estate, if said property is immediately assigned to generated long term rental income.

With this measure, a potential solution remains open for investors who have earmarked their real estate investments for local accommodation, and who now want to secure a source of income,  which although not as attractive as that obtained in many cases through local accommodation, is in the current scenario of economic crisis, a more sustainable and stable source of income.

auctor Pedro Marrana

MCS and its team has more than 20 years of experience in assisting corporate and private clients wishing to relocate to Madeira. For more information on our services please do no not hesitate to contact us.

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Reconversão de Alojamento Local

Nos últimos anos Portugal tem sido considerado um refúgio seguro para diversos expatriados e investidores estrangeiros, que por sua vez têm contribuído em grande escala para a melhoria da economia portuguesa, quer pelo investimento feito no sector imobiliário, ou do imobiliário simultaneamente associado ao sector turismo, nomeadamente apostando no alojamento local, ou ainda pelo facto de muitos realocarem a sua vida e atividade, de uma forma permanente, para o território português.

Foram lançados diversos programas para a captação destes investidores e expatriados, contemplando programas com aliciantes benefícios fiscais como é o caso do regime do Residente Não Habitual, ou programas de “Golden Visa”, onde é atribuída autorização de residência através do investimento no território nacional, tendo a maioria do investimento sido realizado através da aquisição de imóveis.

Nos últimos anos, os referidos programas promoveram um aumento exponencial na aquisição imobiliária, especialmente nos grandes meios urbanos e turísticos, o que também contribuiu de forma enfática no crescimento do sector do turismo, acima de tudo pelo facto de vasta percentagem da aquisição imobiliária ter sido alocada para o sector do alojamento local.

Apesar da crise instalada por conta do surto pandémico da Covid-19, o “Golden Visa” manteve um bom nível de adesão e procura pelos investidores, visto que em Maio do corrente ano, ocorreu um novo aumento no valor do investimento imobiliário, na ordem dos 137 milhões de euros, tendo sido o valor mensal de investimento mais elevado desde Março de 2017.

Não obstante a mensagem de confiança passada pelos investidores em plena situação de crise, a pandemia global veio a agudizar alguns efeitos socioeconómicos que já vinham a preocupar o Estado português, especialmente no campo da habitação dos grandes meios urbanos.

A forte procura por imóveis rentabilizáveis, por parte dos investidores do programa dos “Golden Visa”, aliado ao crescimento da atividade turística em Portugal, e consequentemente do crescente investimento no alojamento local, veio a agravar a crise na sustentabilidade do arrendamento habitacional, especialmente nos grandes polos urbanos onde é efetuado a maioria do investimento imobiliário, e onde se encontram as maiores percentagens de alojamentos mobilados para turistas.

A 06 de Junho de 2020, foi publicada a Resolução do Conselho de Ministros n.º 41/2020 na qual foi aprovado o Programa de Estabilização Económica e Social, onde consta uma medida de Reconversão de Alojamento Local.

A realidade atual é de uma grande incerteza quanto ao rumo do sector do turismo, de como este se irá reerguer, em quanto tempo, e como será a sustentabilidade do alojamento local nestes tempos de combate à pandemia. O turismo susteve a respiração, e quem investiu no alojamento local poderá necessitar a curto-médio prazo de um balão de oxigénio.

Tendo em conta a urgência de dar resposta à população com rendimentos intermédios, na obtenção de arrendamento habitacional, e pelo facto de o sector do turismo, nomeadamente do alojamento local, estar a atravessar grandes dificuldades devido às restrições nas deslocações internacionais, esta medida de reconversão de alojamento local poderá ser uma resposta por forma a combater ambas as dificuldades.

A medida em si é concretizada através do apoio do Estado Português a programas municipais de arrendamento e subarrendamento com rendas mais acessíveis, sendo que as entidades públicas comparticipam em 50% a diferença entre a renda paga e a renda recebida, o que dará certamente uma segurança acrescida ao senhorio, pelo facto de 50% da renda ser garantida pelas entidades públicas.

Ainda acresce uma importante vantagem pela isenção de tributação em sede de IRS ou IRC, sobre os rendimentos prediais resultantes do contrato de arrendamento ou subarrendamento, conforme estipulado pelo artigo 20.º do Decreto-Lei n.º 68/2019.

Esta opção pela reconversão do alojamento local para o arrendamento poderá ser ainda mais apelativa, tendo em conta a alteração do n.º 9 do artigo 3.º do CIRS, levada a cabo pelo Orçamento de Estado de 2020, passando a não ser considerada como mais-valia a transferência para o património particular do empresário de bem imóvel habitacional que seja imediatamente afeto à obtenção de rendimentos da categoria F.

Com esta medida, fica em aberto uma potencial solução para os investidores que destinaram os seus investimentos imobiliários ao alojamento local, e que pretendam agora garantir uma fonte de rendimento, que embora não seja tão atractiva como a que era obtida em muitos casos através do alojamento local, é no atual cenário de crise económica, uma fonte de rendimento mais sustentável e estável.

auctor Pedro Marrana

A equipa da MCS conta com mais de 20 anos de experiência em consultoria fiscal a empresas e indivíduos. Se necessitar da nossa assistência entre em contacto connosco.

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MAR’s Update on Logbooks

The International Shipping Register of Madeira (MAR) has published Circular 04/MAR updating the interpretation of national requirements related to logbooks on MAR registered vessels.

Objective

This circular is intended to advise shipowners, companies and Recognised Organisations (RO), when acting on behalf of the Portuguese administration, of the updated interpretation of national requirements in relation to the logbooks used on board MAR registered ships.

The national requirements

Relevant national legislation requires ships to carry logbooks in accordance with national and international legislation, which shall be authenticated by the relevant national authorities (MAR or DGRM) or a RO on their behalf.

In addition, it also establishes templates for those logbooks.

Although MAR registered ships are subject to a specific regime in several matters, in the case of the provisions related with the logbooks templates there is no reference to exclusions from its applicability to those ships.

Therefore, the understanding and practice has been to fully apply those requirements to MAR registered vessels as well and, consequently, MAR has been supplying vessels with complying books.

The updated interpretation

The Ministry of the Sea has now endorsed an interpretation of the legal provision in question where its application to MAR registered ships does not necessarily include the mandatory use of the logbooks national templates.

Consequence

Following this interpretation, MAR registered ships are no longer required to use logbooks as per the national templates. Obviously, other relevant national and international requirements will continue to be applicable.

In any case, MAR will supply logbooks prepared in accordance with the national templates to companies that choose to continue to use them on board their ships.

Authentication and retention

The national legislation also includes requirements for the authentication and retention of the ships’ logbooks.

The authentication can be done during surveys by the RO, (the cooperation of ROs is kindly requested), by endorsing the masters’ opening and closing statements of the logbooks on board.

The retention of the logbooks on board is two years after the date of the last entry, but subject to international requirements when they impose longer periods of records retention.

Electronic logbooks

The Portuguese administration is also addressing the matter of the use of logbooks in electronic format on board ships in order to adapt the relevant legal and technical framework.

When the national framework changes in that respect, MAR will advise accordingly.

Additional information

If any additional information is required on the subject matter of this circular please do not hesitate to contact us.

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Madeira is open for business

Starting July 1, Madeira and Porto Santo, Portugal, will be open to international travelers. To ensure security for both visitors and residents, all people traveling to the Atlantic islands will have to either present a negative test done within 72 hours prior to departure or be tested upon arrival (without any costs; COVID-19 tests on arrival will be paid for by the Madeira Government).

The Madeira Islands, Discover Madeira says, are focused on being a COVID-safe destination and are working with SGS, a world leader in certification, to ensure good practice across the destination to minimize risk in the wake of COVID-19 (coronavirus).

In May, Madeira developed a good practices document to deal with COVID-19. These measures are intended to provide comfort to those who travel and, ultimately, for the wellbeing of all. These three initiatives—to cover testing costs, partner with SGS in certification and develop a good practices document—form the destination’s plan to ensure a safe vacation for all visitors.

Good to know: According to Discover Madeira, the Portuguese island had very few cases of COVID-19 and acted quickly to control the virus on the archipelago. Portugal, overall, has been commended for its response to coronavirus. At present, Madeira has registered 90 positive cases of COVID-19, 67 recovered cases and no deaths.

Of volcanic origin, its location provides a mild climate and sea all year round, in addition to scenery of mountains, valleys and cliffs, all covered by the Laurissilva vegetation, named Natural Heritage of Humanity by UNESCO. The archipelago is formed by a set of islands, the main and only inhabited being Madeira and Porto Santo.

in Travel Agent Central

Offering unique corporate and personal tax advantages to expats and digital nomads, Madeira is a reference in Portugal for those looking to work and live in the sun. We at MCS have more than 20 years of experience in assisting companies, expats, digital nomads and entrepreneurs relocating to the Pearl of the Atlantic.

 

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Portugal and Madeira are “Safe Travels”

Portugal

Portugal was awarded the “Safe Travels” seal by the World Travel & Tourism Council (WTTC), which aims to certify destinations that comply with hygiene and safety rules and aims to give confidence to those who travel after restrictions to avoid the spread of covid-19. “This seal aims to recognize destinations that comply with health and hygiene protocols aligned with the Safe Travel Protocols issued by the WTTC, helping, above all, to instil confidence in consumers, so that they feel they can travel safely as soon as restrictions raised, “explains the Ministry of State, Economy and Digital Transition, in a statement. The Secretary of State for Tourism, Rita Marques, considers that the award of the seal comes to reward the effort made in the country. “Portugal was a pioneer in the launch of the Clean & Safe seal. This WTTC seal comes to reward the effort that was made by all. The best destination in the world is also understood as the safest in the world”, said the minister. The WTTC also published guidelines for other sectors, such as restaurants, street shopping, aviation, airports, congress centers, meetings and events. The seal can be obtained through the World Travel & Tourism Council website.

in Expresso

Madeira Island

According to the Regional Government, Madeira is the first tourism region to have a destination certification process underway by an internationally recognized multinational.

“Madeira was the first region in Portugal to have a manual of good referencing practices for the sector, participated by the sector, and it is the first tourism region that we know, until now, with an ongoing certification process”, said Eduardo Jesus, Secretary for Tourism, in an interview with the Portuguese news agency, Lusa.

The Secretary for Tourism pointed out that the epidemiological situation of this autonomous region in the context of the COVID-19 pandemic, with 90 cases, 60% of which were recovered, and the absence of deaths caused by the new coronavirus, make Madeira “a very unique and quite differentiated ”, placing this destination“ on a completely different level from the markets with which it regularly works”.

“We want to have the first certifications in July”, he pointed out, explaining that this process “is distinct” from the seal (Covid Safe Tourism) which has “a more immediate logic”, a “short reach”, just filling out a survey, while “Certification requires the implementation of practices”, depending on the verification of the proper implementation “.

Eduardo Jesus emphasized that certification “is a different commitment and one does not invalidate the other”.

“Here the key is that what you do, you do it well. And to do well is not being able to create a false expectation for the traveller ”, based on three prevention criteria, which“ must always be verified in any circumstance: social distance, use of personal protective equipment and health security ”.

“If we apply these three directories at any point during the trip, we have the process safeguarded. That is, before getting on the plane, on the plane, when leaving the plane, when making the first ground transportation, when going to the accommodation, when circulating inside and outside the accommodation, at all these moments there are three major lines to check orientation ”, he stressed.

The Madeiran government official also maintained that everything that is done must “attend to these three universes: whoever visits, who works and who resides”.

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Netherlands to Change Tax Law

Netherlands to change tax law by introducing withholding tax on dividends.

The change is expected to come into effect in 2024, and to be only applicable to dividends sent to countries that have a corporate tax rate of under 9 percent and are included in the EU’s blacklist of non-cooperative tax jurisdictions.

Still in the draft-making, the proposed tax is foreseen to be implemented in combination with a withholding tax on interest and royalty payments that will be effective in 2021.

According to the Dutch State Secretary for Finance, Hans Vijlbrief, “this additional withholding tax represents another major step in our fight against tax avoidance,” as “financial flows channelled from or through the Netherlands to another country where they are not or not sufficiently taxed, will soon no longer go untaxed.” The State Secretary for Finance also stressed that “it’s now vital to make even better international agreements to prevent other countries being used for tax avoidance purposes”.

This expected change to Netherland’s tax law shows that the Netherlands has ceded to international pressure regarding claims that the country used for tax evasion.

in TaxLink

The Netherlands and the Madeira International Business Center (MIBC)

Although at a first glance one would expect that such measure could ruin international groups of companies where money flows exist between the MIBC (given it 5% corporate tax rate) and the Netherlands it is important to mention the following:

  • The MIBC is not an offshore jurisdiction, but a form of State Aid duly approved and regulated by European Union authorities and Portuguese authorities;
  • Companies operating with the MIBC are subject to state of the art economic substance requirements (without which the 5% corporate income tax rate is not granted);
  • The Netherlands cannot discriminate, under EU-Law, a Member State nor their outermost regions.

Further to the above, once concludes that the foreseen tax changes affecting Netherlands do not affect companies licensed to operate within the Madeira International Business Centre. In fact company formation (or company incorporation) in Portugal, for international services, is much more efficient within the scope of the MIBC.

auctor Miguel Pinto-Correia

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