Brussels concludes that the Madeira Free Zone has violated the rules and demands the recovery of the aid

The European Commission concluded today that the Madeira Free Zone (ZFM) regime ignored state aid rules, since it covered companies that did not contribute to the development of the region, so Portugal must recover the support provided.

After an in-depth investigation started in 2018, the EU executive announced today that it concluded that “the implementation of Regime III of the Madeira Free Zone in Portugal is not in line with the Commission’s state aid decisions”, since “the The objective of the approved measure was to contribute to the development of the outermost region of Madeira through tax incentives ”, aimed exclusively at companies that create jobs in the region, which it concluded did not happen.

Underlining that it does not question the situation of the outermost region of Madeira or its eligibility to receive regional aid, the European Commission notes that its investigation “revealed that the tax reductions were applied to companies that did not represent any added value for the development of the region” , having previously created jobs outside Madeira “and even outside the EU”, without taking into account the conditions of European decisions and rules on state aid.

Therefore, Portugal must now recover all the “undue aid, plus interest, from these companies”, determined the Commission, which does not quantify the amounts in question.