22.8.2022
EN
Official Journal of the European Union
L 217/61
(58)
In the meeting with the Commission services on 10 April 2019 referred to in recital 8 of this Decision, Portugal was recalled the procedural steps of the ongoing formal investigation procedure and reminded of the commitment of mutual cooperation from September 2017, which had not brought fruitful results so far.
Furthermore, Portugal was invited to provide the missing information in accordance with paragraph 64 of the Opening Decision, which would allow the Commission services to have a full set of facts/information on the ZFM scheme.
(59)
By letter of 24 April 2019 (71), to address the Commission’s preliminary view on the inappropriateness of the tax controls (72), Portugal submitted data regarding tax controls carried out between 2015 and 2018 on ZFM beneficiaries (73) by means of tax inspections.
In the period concerned, [300-600] tax inspections have been initiated and [300-600] tax inspections have been completed.
Tax corrections reported amount to approximately EUR [100-250] million.
Portugal further reported divergences regarding [100-300] ZFM beneficiaries’ tax returns.
However, as regards the closed tax inspections for the ZFM scheme (Regime III), the information provided did not allow to establish the link between the tax controls and corrections reported and the two issues on which the formal investigation procedure was initiated.
(60)
In addition, Portugal recognised that the criteria for job creation/maintenance should be further clarified, aiming at eliminating any doubts concerning its interpretation, by preventing abuse of the aid in question and by introducing further guarantees that the job accounting would contribute to Madeira social and economic development (74).
In this regard, Portugal submitted a draft Order (‘projeto de despacho da Vice-Presidência do Governo Regional da Madeira’) clarifying the concept of ‘job creation’ in line with the definitions in the 2007 RAG (75).
(61)
In this context, Portugal recognised that the introduction of legislative changes in the ZFM scheme were necessary to avoid potential abuse.
Furthermore, Portugal put forward a set of legislative, regulatory and inspective measures to the ZFM scheme for which it asked the Commission’s agreement by means of a recommendation proposing appropriate measures to the Member State concerned pursuant to Article 22(a) and (b) of Council Regulation (EU) 2015/1589 (76).
Alternatively, Portugal envisaged that such legal amendments should be approved by Commission decision (‘conditional decision’), as provided for in Article 9(4) of Regulation (EU) 2015/1589 (77).
(62)
In this regard, further to the clarification of the concept of ‘job creation’ indicated in recital 60 of this Decision, Portugal proposed amendments to the legal basis of the ZFM scheme (78): (i) the exclusion of the SGPS (79); (ii) the consignation of the ZFM corporate income tax revenue to health and education policy objectives; (iii) the creation of a specific anti-abuse clause for the ZFM scheme in accordance with Council Directive (EU) 2016/1164 (80) on tax avoidance practices that directly affect the functioning of the internal market as regards hybrid mismatches with third countries; and (iv) the definition of criteria to identify large tax payers in the ZFM whose taxation situation requires permanent monitoring by the Free Zone Office (‘Gabinete da Zona Franca’) (81) as a complement to taxation inspection activities to be conducted on an annual basis.
(71) Letter from Portugal of 24 April 2019 (2019/055874).
(72) Paragraphs 36, 44 and 45 of the Opening Decision.
(73) The reporting also covers Regime IV, the successor ZFM scheme (2015-2020) which is being implemented by Portugal since 1 January 2015 under the 2014 GBER.
(74) Letter from Portugal of 24 April 2019, p. 4. (75) The draft Order aims to ensure that: (i) part-time work is accounted for only in proportion to the number of hours worked (‘full-time equivalent’), (ii) the link between the worker and the Madeira region is ensured, and (iii) the creation and maintenance of jobs by means of temporary work is not considered within the definition.
Differently from the first version of the draft Order submitted on 6 April 2018, the current version applies also to Regime III (the ‘2018 draft Order’ applied only to Regime IV).
(76) Council Regulation (EU) 2015/1589 of 13 July 2015 laying down detailed rules for the application of Article 108 of the Treaty on the Functioning of the European Union (OJ L 248, 24.9.2015, p. 9).
(77) Letter from Portugal of 24 April 2019, p. 3.
(78) Article 36 of the EBF covers matters falling within the field of reserved legislative competence of the national Parliament (i.e. taxes and tax advantages).
See Article 165(1)(i) of the Portuguese Constitution.
Portugal recognised that proposed amendments aiming to introduce a ‘new scheme’ for the ZFM require further legal acts approved by the national parliament and cannot be implemented merely by administrative measures.
See letter from Portugal of 24 April 2019, p. 4.
(79) Recital 36 of this Decision.
(80) Council Directive (EU) 2016/1164 of 12 July 2016 laying down rules against tax avoidance practices that directly affect the functioning of the internal market (OJ L 193, 19.7.2016, p. 1).
(81) Regulatory Decree No 14/2015/M of 19 August 2015.
In accordance with Article 8(1), the mission of the office is to monitor and coordinate the activities performed in the ZFM.