The Taxation Big Brother Is Already Here
A common misconception among expats in Madeira is that they can “choose” where to pay taxes. The truth is far less forgiving.If you spend more than 183 days in Portugal, you are considered a tax resident and must declare and pay taxes here on your worldwide income. And if you fail to comply, you won’t simply “go unnoticed.”
Under the Automatic Exchange of Information (AEOI) system, tax authorities across Europe, including Madeira, routinely share your financial data. In 2021 alone, Portugal’s Tax and Customs Authority (AT) carried out more than 5.2 million automatic exchanges of information, a 19% increase compared to 2020.This is the reality: the era of hidden bank accounts and undeclared income is over.
How Automatic Exchange of Information Works
The AEOI, implemented through Decree-Law n.º 64/2016, transposes EU directives into Portuguese law. Combined with the OECD Common Reporting Standard (CRS), it creates a worldwide web of information sharing.
Your bank in Madeira is required to report account balances, dividends, pensions, real estate income, and even cross-border tax rulings. The same happens abroad: if you have a foreign account, that information will be sent back to Portugal.
Under the EU’s DAC8 Directive, crypto transactions will also be subject to automatic reporting.
There is no hiding.
The Risks for Expats in Madeira
If your tax residency status is not up to date in all jurisdictions, you face:
- Double taxation – being taxed in Portugal and your country of origin.
- Tax audits – triggered by mismatched information between jurisdictions.
- Criminal liability – undeclared income in Portugal constitutes a tax crime.
- Visa/residency risks – non-compliance can jeopardise your residence permit or naturalisation.
This is why relying on professional accountants in Madeira is not optional, it is essential.
How Accountants in Madeira Protect You
At Madeira Corporate Services (MCS), our certified accountants and tax advisors help expats avoid costly mistakes by ensuring:
- Correct tax residency status updates across Portugal and country of origin.
- Proper filing of IRS (personal income tax) and IRC (corporate tax) returns.
- Ongoing compliance with CRS/AEOI reporting rules.
- Strategic planning for expats working in IT, shipping, or investing in property.
- Preparation for the coming wave of crypto reporting under DAC8.
Since 1995, MCS has been the trusted partner for expats, investors, and entrepreneurs relocating to Madeira.
Conclusion: There Is No Point in Hiding
The Taxation Big Brother is watching. Every account, every transaction, every source of income is traceable and shared between jurisdictions.
If you are an expat in Madeira, don’t risk fines, audits, or criminal charges. Secure your future by working with experienced accountants in Madeira. Contact Madeira Corporate Services today to ensure your finances are transparent, compliant, and protected.
The founding of Madeira Corporate Services dates back to 1996. MCS started as a corporate service provider in the Madeira International Business Center and rapidly became a leading management company… Read more
