Lei das Finanças Regionais
Published 5 November 2026, 22:39
Lei das Finanças Regionais (law on the finances of the autonomous regions)
The law that governs the budgets of Madeira and the Azores. Among other things, it allows the regions to set their tax rates below the mainland ones, by up to 30%. Madeira uses this margin to the full: IRS rates on the island are 30% lower than on the mainland across all nine bands.
Where you come across it. Conversations about taxes in Madeira and the Azores, regional budgets, announcements of IRS cuts.
The reduction is applied to the mainland rate, not to the amount of tax, and moves with it: if the mainland rate is lowered, the island rate falls too, and the gap stays the same.