BRUSSELS (Reuters) - The European Commission on Friday said it had opened an in-depth investigation into tax exemptions for companies on the Portuguese island of Madeira, assessing whether they constituted illegal state aid.
Under the programme, established in 1987, Portugal set up a regional aid scheme to attract companies to the island by reducing corporate taxes and providing exemptions from other levies.
"In particular, the Commission has concerns that tax exemptions granted by Portugal to companies established in the Madeira Free Zone are not in line with the Commission decisions and EU State aid rules," the Commission, which oversees competition in the European Union, said in a statement.
The Commission, which had approved the scheme in 2007 and 2013, added it was concerned Portugal was not respecting the conditions it had set out on those occasions.