Impostos a Portugal

Company Tax

21% for mainland Portugal

Tax Rate For Foreign Companies

Resident companies are taxed on their worldwide income. Foreign companies are subject to the same taxes as local companies, but they are only taxed on Portuguese-source income. The tax rate on investment income that is both derived by non-resident entities subject to a privileged tax regime in their country of residence and included on Portugal's blacklist is 35%. Certain withholding taxes apply to income generated in Portugal that is attributable to non-residents without a permanent establishment in the country.

Capital Gains Taxation

Capital gains are generally included in taxable profits and taxed at the standard corporate rate. Gains on the disposal of shares may be exempt if the following conditions are met: 1) the shareholder is not considered a transparent entity 2) the entity has held at least 10% of the capital of the subsidiary for at least 12 months 3) if the entity is a foreign company the corporate income tax in its country of residence covers at least 60% of the tax due in Portugal. The exemption does not apply if the dividend payment is tax-deductible. Since 1 January 2018, capital gains on the indirect sale of certain properties are also subject to corporate income tax.

Main Allowable Deductions and Tax Credits

Expenses incurred to generate profits and certain provisions (including bad debt and inventory losses) are deductible from the corporate tax base. With certain limitations, impairment losses on doubtful debts are deductible for tax purposes when an insolvency or recovery has been requested or the credits have been claimed in court. An intellectual property (IP) regime provides a 50% tax credit for income derived from the transfer or use of patents and industrial designs or models. Further tax incentives are available for qualifying new investment projects, R&D, fixed-asset investments and creation of jobs. Small companies also benefit from special tax regimes. Start-up and research expenses are deductible for tax purposes in the respective tax year.

Donations to authorised charitable institutions are allowable at up to 0.8% of turnover, with the possibility for an increase of the amount actually spent up to 150%. Donations to authorised educational, sport, and environmental institutions are allowable at up to 0.6% of turnover, with the possibility for an increase of the amount actually spent up to 140%. An additional deduction of 40% is allowed for donations to hospital institutions integrated in the regional health public services in an effort to fight the COVID-19 epidemic (valid for donations made until 31 December 2020).

Pension, invalidity, and health schemes are tax-deductible up to a rate of 15% of annual staff expenses, only if, among other conditions, they are available to all employees and the management and disposition of the benefits are outside the control of the taxpayer. Companies may only deduct net financing expenses up to the higher of the following limits: EUR 1 million or 30% of the earnings before depreciations, amortisation, taxes, and net financing expenses, adjusted for tax purposes.

A tax credit covering 32.5% of research and development expenditure is available for the year in which these expenses are incurred and can be carried forward for a period of eight years. Companies can claim an additional tax credit of 50% of R&D expenditure if their expenditure exceeds the average in two fiscal years (capped at EUR 1.5 million).

A corporate tax credit between 10% and 25% of the amount of the relevant investment may be granted on the acquisition of new tangible and intangible fixed assets (with some exceptions and limitations), as well as a total or partial exemption from real property tax, transfer tax, and stamp duty. The tax credit granted can offset up to 50% of the corporate income tax liability and can be carried forward for 10 years.

A special investment tax credit scheme allows eligible taxpayers that make investments between 1 July 2020 and 30 June 2021 for the acquisition of tangible and intangible fixed assets and non-consumable biological assets to benefit from a 20% corporate income tax credit for eligible investments up to a limit of EUR 5 million (capped at 70% of the corporate income tax liability; can be carried forward for five years).

Net operating losses can be carried forward (up to 70%) for a period of five years (12 years for SMEs - capped at 70% of the taxable income, increased to 80% for tax losses incurred in 2020 and 2021 due to the COVID-19 crisis). The carryback of losses is prohibited.

Other Corporate Taxes

Other taxes levied include: property transfer tax (Imposto Municipal sobre as Transmissões Onerosas de Imóveis or IMT - payable by the buyer at a maximum rate of 6% on the transfer of residential property, 5% on the transfer of rural property, 7.5% on the transfer of other urban property and 10% if the purchaser is located in a listed tax haven); municipal real estate holdings (Imposto Municipal sobre Imóveis or IMI - 0.3% to 0.45% for urban real estate, 0.8% for rural real estate, 7.5% for property owners residing in a tax heaven); stamp duties (0.5% to 10%).

A standalone tax of 35% is levied on indemnities and compensation as well as bonuses paid to members of the board and managers (if exceeding 25% of their annual remuneration and EUR 27,500). Certain deductible expenses are subject to a standalone tax, including: entertainment expenses (10%), undocumented expenses (taxed at 50%, or 70% in the case of taxpayers enjoying a partial or total tax exemption), expenditure on private cars (taxed at rates from 5% 35% depending on the acquisition price of the car), daily allowances and employees' travelling costs (taxed at 5%).

A special contribution is levied on companies operating in the financial sector, with two different tax bases: the contribution is applicable at a maximum of 0.11% on base I and at 0.00030% on base II.

Social security contributions paid by the employer amount to 23.75% of the monthly gross remuneration.

In 2021 a carbon tax due by the user in the amount of EUR 2 applies on air, sea and river travels. A levy amounting to EUR 0.30 per package will be levied from 2022 on disposable packages used on takeaway meals.

Various stamp duties apply on certain agreements, deeds, and documents, as well as certain transactions not subject to VAT.

Special taxation rules apply to entities engaged in activities such as oil exploration, prospecting, and production, and to those operating in the gaming industry.

Other Domestic Resources

Portuguese Tax and Customs Authority

Doing Business: Portugal, to obtain a summary of taxes and mandatory contributions

Tax Rate

Allowable Deductions and Tax Credits

Business expenses are generally deductible at different rates, including entertainment expenses and per diems.
Tax credits may be claimed according to the family composition, children (fixed amount of EUR 600 per dependant, plus an additional deduction of EUR 126 when the dependents are aged up to 3 years old), certain general expenses (35% of the expenses incurred by any member of the household, limited to EUR 250 per taxpayer) and health expenses (15%, up to a limit of EUR 1,000), interest on certain loans and financial leasing rent, education expenses (30% of expenses incurred for each member of the household, capped at a global limit of EUR 800), retirement home expenses, VAT borne in certain sectors, qualifying pension fund contributions, donations (up to 25% or 15% depending on the beneficiary), alimony payments (20%), and more.
150% of union fees may be deducted against employment or pension income, up to a limit of 1% of the gross employment or pension income. EUR 4,104 of pension income is tax exempt.

A partial exemption is available on employment income earned by taxpayers aged between 18 and 26 that do not qualify as dependents and earn a yearly gross income equal or lower than EUR 29,179. The taxable income is reduced to EUR 25,075 in the first three years in which these taxpayers receive income, after the year of completion of a certain level of education.

Special Expatriate Tax Regime

Non-residents are liable to income tax only on Portuguese-source income, including remuneration borne by a Portuguese company or permanent establishment.

A taxpayer who has become tax-resident in Portugal for a certain year and has not been taxed as resident in Portugal for any of the previous five years may apply for the special tax regime for "non-habitual tax residents". Non-habitual residents are taxable on worldwide income, but may be exempt from tax on certain foreign-source income. In general terms, non-habitual residents are taxed at a flat rate of 20% in respect of employment income (Category A) and self-employment income (Category B) arising from high-value activities of a scientific, artistic, or technical nature. Entrants in the regime that became Portuguese tax resident as from 1 April 2020 are liable to a 10% tax rate on pension income. For further information, click here.

A tax exemption also applies to outbound expatriates, who are resident individuals assigned abroad for a period longer than 90 days.
Foreign residents may be exempt from social security in Portugal if they contribute to a compulsory social security system in a European Union country or a country that has a bilateral social security agreement with Portugal.