On the island of Madeira, there is a free trade zone with a tax regime that is the definition of a tax haven. This zone has around 3 000 companies registered within it. Of these, 1 677 do not have a single employee working for them. Tax rates vary between 1 and 5%. Forty of the main European and global banks are based there, including Citibank, Deutsche Bank and Chemical Bank.
In this tax haven, it is possible for a trust to open an account without revealing the identity of the company behind it. The annual loss of tax revenue to the Portuguese State, by virtue of the tax benefits granted, is estimated at about 1.5 billion euros. On the island of Madeira, the poverty rate stands at 33%.
According to a list of tax cases under investigation by the Commission, submitted by Commissioner Margrethe Vestager to the TAXE Committee (Special Committee on Tax Rulings and Other Measures Similar in Nature or Effect), the Madeira Free Trade Zone sits, inevitably, at the top of the list.
Last March, this same Committee approved the 4th Tax Regime for the Madeira International Business Centre, thereby extending the existence of the Madeira Free Trade Zone until 2027. I therefore ask the European Commission: how does it explain this dual behaviour?