Isabel Santos Fidalgo, António Queiroz Martins and Francisca Osório de Castro write for AFP magazine

Isabel Santos Fidalgo, António Queiroz Martins and Francisca Osório de Castro write the article entitled "Madeira Free Trade Zone: Between the Swan Song and the Deductibility of State Aid", published in AFP's Electronic Journal of Taxation.

“The present work reflects a different point of view from a tax perspective to the state aids topic. In fact, the doctrine and the ECJ have broadly covered the traditional aspects regarding state aid matters. However, few critical thinking has been published on the nature of the recovery obligations that the Companies may be subject to in benefit of the State whenever a specific tax regime is considered to infringe the EU state aid legal regime.

This topic is particularly relevant after Case T-95/21 from 21 September and Case T-131/21 from 21 June 2023 considering that, in practice, taxpayers are being notified of the execution of recovery decisions, which represent a significant expense, in favour of the Portuguese Tax Authorities.

With this in mind, the purpose of this article is to, in an unprecedented manner, discuss the legal nature and correspondent tax treatment of recovery decisions in the context of unlawful and incompatible state aid through the analysis of the case of the III regime of the Madeira Free Trade Zone, which was declared incompatible with EU law by the European Commission. […]”.

Click here to read the full article.