Currently, the general Corporate Income Tax (“CIT”) rate in the mainland territory is 20%, with a reduced rate of 16% being applicable to the first €50,000 of taxable income in the case of small and medium-sized enterprises (SMEs) and small and medium capitalization companies (Small Mid Cap).
According to Law 64/2025, the general CIT rate will be reduced over the next three years as follows:
- In 2026, the CIT rate will be 19%;
- In 2027, the CIT rate will be 18%; and
- From 2028 onwards, the CIT rate will be 17%.
In the case of SMEs and Small Mid Cap companies, a reduction in the rate applicable to the first €50,000 of taxable income to 15% is also approved, with the reduction being applicable from 2026 onwards.
The rate applicable to entities that do not primarily engage in commercial, industrial, or agricultural activities will also be reduced from 20% to 17% in accordance with the same schedule provided for companies.
Despite this reduction, the municipal surcharge rates (up to 1.5%) and the State surcharge rates (between 3% and 9%) remain unchanged.
Similarly, the general rate of 12.5% applicable to startups remains unchanged provided the following requirements are met:
- Be an innovative company with high growth potential, featuring an innovative business model, products, or services;
- Have completed at least one round of venture capital financing by an entity legally qualified to invest in venture capital, subject to the supervision by the CMVM or an equivalent international authority, or through the contribution of equity or quasi-equity instruments by investors other than the company’s founding shareholders (e.g. business angels certified by IAPMEI);
- Have received investment from Banco Português de Fomento, S.A., or from funds managed by it, or by its subsidiaries, or from one of its equity or quasi-equity instruments.
With the measures now introduced, the general CIT rate will once again fall below the European Union average. However, the maintenance of the municipal and State surcharges implies that the maximum tax rate applicable to companies could reach up to 27.5%.