Corporate Tax in Portugal

Overview by
Tax Base For Resident and Foreign Companies
Foreign companies are taxed on the profits they make in Portugal. For further information access the web portal of the Finance Ministry (in Portuguese).

Tax Rate

IRC (Portuguese corporate tax) 25% + a municipal surcharge (up to 1.5% of the taxable income). Effective rate: 26.5%
Companies established in the Azores or Madeira 17.5 to 22.5%
Special tax rate for the first EUR 12,500 of revenues 12.5%
Tax Rate For Foreign Companies
Same rate but only taxed on Portuguese-source income.
Capital Gains Taxation
Long term capital gains are taxed in Portugal at the standard Corporate Tax rate, i.e. 26.5%. Some exemptions apply on some type of capital.
Main Allowable Deductions and Tax Credit
To determine fiscal results you can deduct: depreciation, interest, remuneration of directors (totally deductible), and royalties. The fiscal loss of a given year may be carried forward over one or several of the six following accounting years. On the other hand, the carry-back method is not authorized.
Expenses are deductible for depreciation or amortization, reserves, rents for premises and equipment, wages, etc.
Tax credit exists especially for apprenticeships. Additional information.
Other Corporate Taxes
Stamp duty is levied on many types of transactions. Real Estate transfer tax apply at rates from 5 to 8%, depending on type of assets and area concerned.

Country Comparison For Corporate Taxation

  Portugal OECD United States Germany
Number of Payments of Taxes per Year 8.0 14.2 11.0 16.0
Time Taken For Administrative Formalities (Hours) 298.0 199.3 187.0 215.0
Total Share of Taxes (% of Profit) 43.3 43.0 46.8 48.2

Source: Doing Business

Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action. **** The Greater the Index, the Higher the Level of Investor Protection.

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