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Angra do Heroísmo ,  July 02, 2014

Government of the Azores creates tax benefits scheme for investment projects by reducing corporate tax, property tax and real estate transfer tax rates

The Vice-President of the Government of the Azores presented today a new tax benefits scheme that will be applicable to investment projects of "recognised strategic importance to the regional economy."

Sérgio Ávila announced during a press conference that tax reduction scheme in conjunction with the policy of incentives embedded in Competir+ will endow the Azores with "unique and extremely attractive conditions for the growth of private investment" until 2020.

Regulated by a decree published on June 27, the tax benefits scheme for business investment provides corporate tax deductions as well as the exemption or reduction of property tax and real estate transfer tax rates for investments over two million Euros on the islands of São Miguel and Terceira, and over 400 thousand Euros on the islands of Santa Maria, Graciosa, São Jorge, Pico, Faial, Flores and Corvo.

"With the new tax benefits scheme, the Government of the Azores has decided to reinforce the positive discrimination of less populated islands. In fact, this a way of further stimulating private investment on these islands and, thus, revitalise the economic sector of each islands, which will have a positive impact on employment creation and wealth general in the Region," stated Sérgio Ávila.

However, the government official added that the investment projects to be covered by the new tax benefits scheme are "required to ensure the production of tradable goods and services that are capable of boosting our exports and reducing imports - these products and services should be marketed outside the island where they were produced - or that contribute to the redevelopment of the urban centres of towns and cities."

According to the Vice-President, the investment projects relating to the production of tradable goods and services should also contribute to the achievement of at least two goals from a series of goals stipulated by the Regional Government.

The creation of jobs, the diversification of regional economic structure, the introduction of innovative technological processes, the mitigation of regional disparities and the reduction of the costs of insularity are some of the goals to be achieved.

The tax benefits granted under the new scheme correspond to a corporate tax deduction, up to a limit 90%, of an amount that can reach 30% of the relevant applications concerning the implementation of the investment project.

This measure also provides an increase of benefits in accordance with the creation of jobs or if the investment projects will be implemented in specific geographic areas.

Furthermore, the new scheme provides the exemption or reduction of the Property Tax for a period of 10 years in the case of buildings used by the promoters of the investment project. It also provides the exemption or the reduction of least 75% of the Real Estate Transfer Tax for the buildings purchased by the project's promoter with the aim of using them in the operations carried out under the investment project.

 The Vice-President of the Government stressed that the tax benefits on Property Tax and Real Estate Transfer Tax is subject to assessment by the municipality of the area where the investment projects will be implemented as well as to the waiving of tax compensation for the expenses incurred; the later must be issued by the competent municipal body.

"With this measure, the Azores now have a tax policy that has no parallel in the national territory," Sérgio Ávila said, stressing that the new tax benefit incentive scheme adds up to favourable corporate tax, property tax and real estate transfer tax rates.

For the government official, the new scheme can contribute to the "reinforcement of the competitiveness of regional economy, thus being an economic policy tool with undeniable interest to the promotion of private investment."

Applications for these tax benefits may be submitted at the Society for the Business Development of the Azores (SDEA) or at the Business Support Offices located on all islands.



Official government press-releases presented in all foreign languages interfaces of the Azorean Government Portal (Portal do Governo dos Açores) are a sub-set of the government's official press-releases daily output and are chosen for translation and publication on the foreign language interfaces based on audience segmentation criteria. The entire collection of the Azorean government press-releases is available in portuguese, here, from the GACS Press Office site.

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