Updated March 2026
Portugal’s corporate tax system is one of the most competitive in Europe. The IRC (corporate income tax) was lowered to 19% in 2026, with a reduced rate of 15% for SMEs on the first €50,000 of profit. For expat business owners who don’t speak Portuguese, an
English-speaking accountant is essential.
Portugal company tax rates 2026
| Tax | Main rate 2026 | SME / Special |
|---|---|---|
| IRC | 19% + municipal surcharge 1.5% | 15% on first €50,000. Madeira: 13.3% |
| VAT | 23% / 13% / 6% | Azores: 16% / 9% / 4% — Stable 2026 |
| IMT | Brackets (0% up to €106,000) | Under-35s: exempt up to €330,539 (1st residence) |
| IMI | 0.3% – 0.45% (urban) | 3-year exemption if value <€125,000 |
| Stamp duty | Variable by transaction | No major change 2026 |
English-speaking accountant for your company’s taxation in Portugal
When setting up a business in Portugal, tax assumptions from your home country often don’t apply. Portuguese tax law has its own rules, special regimes and optimisation techniques. Without speaking the language, English-speaking tax and accounting support is essential to avoid costly mistakes. Use the form below to be put in touch with an English-speaking accountant based in Lisbon.
Corporate Income Tax (IRC)
IRC is the main annual corporate tax in Portugal. In 2026, the rate has been lowered to 19% of net profit, plus a municipal surcharge of 1.5% in most municipalities.
- Standard rate 2026: 19% + municipal surcharge 1.5%
- SMEs and Small Mid Caps: 15% on the first €50,000 of taxable profit (significant improvement vs 17% on €15,000 previously)
- Madeira: 13.3% (autonomous region preferential rate)
- State surcharge: degressive for SMEs, can reach up to 9% above €1,500,000 of taxable income
Note: in the first years of activity, the Special Payment on Account applies from the 3rd year when the company posts a loss. Consult your accountant to anticipate this advance payment.
VAT — Value Added Tax
Portuguese VAT is stable in 2026. It applies at all stages of the economic cycle and is non-cumulative (tax credit method). Three rates on the mainland:
- Standard: 23%
- Intermediate: 13%
- Reduced: 6%
Autonomous regions: Azores (16% / 9% / 4%) and Madeira (differentiated lower rates). Relevant for businesses exporting or operating from the islands.
IMT — Municipal Tax on Property Transfer
IMT applies to onerous real estate transactions (purchase and sale of houses, shops, land, etc.). Brackets were revalued by +2% in 2026, with full exemption for young first-time buyers.
- 0% up to €106,000
- Under-35s: fully exempt up to €330,539 for a first permanent residence
- Urban properties (general use): progressive rate by bracket
- Rural buildings: 5%
- Offshore-resident buyers: 10%
IMT exemptions may apply for: resale properties, urban rehabilitation, real estate investment funds for rental housing (FIIAH), investment promotion, tourist use, forestry activity. Always verify the applicable exemption with your accountant.
IMI — Municipal Property Tax
IMI has existed in Portugal since 2003 and is stable in 2026. Calculated annually based on location, use type and asset value. Base rates:
- Urban buildings: 0.3% – 0.45%
- Rural buildings: 0.8%
- Offshore-owned properties: 7.5%
Enhanced exemptions in 2026 for renewable energy and energy-efficient buildings. 3-year exemption if patrimonial value is below €125,000 (e.g. first permanent home purchase). IMI simulator available on the Portal das Finanças.
Stamp Duty — Imposto do Selo
Stamp duty is the oldest tax in the Portuguese tax system (1660). No major reform in 2026. It applies to a wide range of transactions (contracts, loans, insurance, assignments). Rates and specifics vary by transaction type — full details on the Portal das Finanças.
Other taxes and 2026 incentives
Other taxes relevant to businesses and individuals in Portugal:
- IRS — Personal Income Tax in Portugal
- CEI — Excise Tax
- TA — Customs Duties
- ADT — Double Taxation Treaties (Portugal has agreements with the UK, Ireland, Germany and many others)
2026 SME incentives: tax deductions for R&D and digitalisation investments. Ask an English-speaking accountant in Lisbon to identify the regimes applicable to your activity.
English-speaking tax or accounting support
By validating the contact form, you authorise me to forward your request to an English-speaking professional based in Lisbon who will be able to contact you directly. Essencial Portugal connects individuals and companies with trusted, certified professionals in Portugal. Only these certified professionals are able to inform you, offer and invoice these services.
