Madeira IRS: new rates keep 30% reduction across all tax brackets

The Legislative Assembly of the Autonomous Region of Madeira has approved a decree that maintains in 2026 the 30% reduction across all brackets of the personal income tax (IRS) applicable to residents of the region. Regional Legislative Decree No. 17/2026/M, published in the Official Journal on 9 November 2026, replaces the IRS rate table currently in force and takes effect from 1 January 2026.

What changes#

The diploma amends Article 2 of Regional Legislative Decree No. 3/2001/M, of 22 February, which sets the IRS rates applicable in Madeira. The approved text replaces the general table provided for in Article 68 of the IRS Code (CIRS), which is the national law governing the tax, with a regional table of its own.

The preamble of the decree explains that the aim is to maintain the 30% reduction across all income brackets, in view of the reduction of IRS rates applicable nationally. According to the same text, this reduction stems from the commitment made for 2026 and guarantees an increase in the disposable income of families in Madeira and Porto Santo.

Who is covered#

The measure applies to IRS taxpayers resident in the Autonomous Region of Madeira, that is, to individuals who pay the tax and are tax residents in the region. The decree does not define other categories of beneficiaries.

Amounts, deadlines and conditions#

The new table has nine brackets of taxable income, that is, the amount of income after legal deductions. For each bracket, the diploma sets two rates, identified as Normal (A) and Average (B), except for the last bracket, for which only one rate is given. The amounts are as follows:

• Up to 8,342 euros: 8.54% (A) and 8.54% (B)
• From more than 8,342 up to 12,587 euros: 10.64% (A) and 9.248% (B)
• From more than 12,587 up to 17,838 euros: 14.49% (A) and 10.791% (B)
• From more than 17,838 up to 23,089 euros: 16.52% (A) and 12.094% (B)
• From more than 23,089 up to 29,397 euros: 21.42% (A) and 14.095% (B)
• From more than 29,397 up to 43,090 euros: 24.22% (A) and 17.313% (B)
• From more than 43,090 up to 46,566 euros: 30.17% (A) and 18.272% (B)
• From more than 46,566 up to 86,634 euros: 31.22% (A) and 24.261% (B)
• Above 86,634 euros: 33.6%

The published text does not explain the difference between the Normal (A) and Average (B) rates, nor does it indicate how each applies to each taxpayer. It also does not present examples of the impact on the tax payable per level of income.

The decree enters into force on the day after its publication, but its effects are retroactive to 1 January 2026. The reduction therefore covers the whole of 2026.

Background#

A regional legislative decree is a diploma approved by the legislative assembly of an autonomous region, within the powers conferred by the Constitution and the Political-Administrative Statute of the Region. In this case, the decree was approved in plenary session on 27 October 2026, signed on 3 November 2026 by the Representative of the Republic for the Autonomous Region of Madeira, Paulo Duarte Barreto Ferreira, and published on 5 November.

The reduction is based on the Budget of the Autonomous Region of Madeira for 2026, approved by Regional Legislative Decree No. 8/2025/M, of 30 December. According to the preamble, that budget applied the maximum limit legally permitted for the tax differential, which resulted in a total reduction of 30% across all IRS brackets. The new decree maintains this reduction and updates the rates in accordance with the amendment to Article 68 of the CIRS.

Regional Legislative Decree No. 3/2001/M, of 22 February, was republished in 2016 by Regional Legislative Decree No. 33/2016/M and has been amended several times since, including by Regional Legislative Decree No. 8/2025/M. The diploma now published adds one more amendment to this law.