Since 2024, Portugal is setting up business here.

The IRC, “Imposto sobre o Rendimento de Pessoas Coletivas,” is the corporate income tax in Portugal. Here, we are referring to SMEs and micro-enterprises. It is calculated based on pre-tax income (RAI), from which any loss carried forward from the previous fiscal year may be deducted. In addition to the tax relief program for startups mentioned above, several standard rates apply:

• 15% on amounts up to €50,000
• 19% on amounts above that.

Reduced rates apply to the autonomous regions of Madeira and the Azores:

The city where your business is located is entitled to a small portion of your RAI. This tax is called the Derrama da Câmara Municipal and is generally 1.5%. However, it may vary by municipality and can be reduced—or even waived—depending on your revenue. Be sure to speak with the mayor to discuss this!

There is also a state-level Derrama on very high profits, with a first threshold at 1.5 M and a second at 7.5 M.

The tax is paid in three installments (July, September, and December). It is calculated based on 80% of the previous year’s income. Any adjustment is made at the beginning of the following year.

Regarding corporate income tax, Portugal is in line with the European average. Visit the Portal das Finanças to learn more about the IRC.

The IRC, “Imposto sobre o Rendimento de Pessoas Coletivas,” is the corporate income tax in Portugal. Here, we are referring to SMEs and micro-enterprises. It is calculated based on pre-tax income (RAI), from which any loss carried forward from the previous fiscal year may be deducted. In addition to the tax relief program for startups mentioned above, several standard rates apply:

• 15% on amounts up to €50,000
• 19% on amounts above that.

Reduced rates apply to the autonomous regions of Madeira and the Azores:

The city where your business is located is entitled to a small portion of your RAI. This tax is called the Derrama da Câmara Municipal and is generally 1.5%. However, it may vary by municipality and can be reduced—or even waived—depending on your revenue. Be sure to speak with the mayor to discuss this!

There is also a state-level Derrama on very high profits, with a first threshold at 1.5 M and a second at 7.5 M.

The tax is paid in three installments (July, September, and December). It is calculated based on 80% of the previous year’s income, net of withholding taxes. Any adjustment is made at the beginning of the following year.

Regarding corporate income tax, Portugal is in line with the European average. Visit the Portal das Finanças to learn more about the Corporate Income Tax Code (IRC).

IRC for traditional SMEs

A special tax of 12.5% for start-ups recognised as such.

IRC for traditional SMEs

IRC for traditional SMEs

A special tax rate of 12.5% for certified start-ups.

A special, favorable corporate income tax (IRC) rate for certified startups in Portugal will remain in effect in 2026.

This regime, initially introduced by the Startups Act (Lei das Startups No. 21/2023), provides innovative startups with even more favorable tax treatment than that afforded to traditional SMEs.

The corporate income tax (IRC) schedule for certified startups

Reduced rate of 12.5%: This applies to the first €50,000 of taxable income (on the mainland). As a reminder, the reduced rate for a traditional SME is 15% on this same bracket.

Standard rate of 19%: The standard tax rate applies to profits exceeding 50 K€.

Regional benefit in Madeira: For startups registered and certified in the Autonomous Region of Madeira, this reduced rate drops to 8.75% on the first 50,000 € of profits.

Eligibility Requirements

To qualify for this 12.5% rate, the company must hold official startup certification issued by the public agency Startup Portugal. The key cumulative criteria include:

• Having been in business for less than 10 years.
• Employing fewer than 250 people.
• Generating annual revenue of less than 50 million euros.
• Having its headquarters or a permanent representative office in Portugal.
• Demonstrating an innovative nature (e.g., investments in R&D, incubation, or a highly scalable business model).

A special, favorable corporate income tax (IRC) rate for certified startups in Portugal will remain in effect in 2026.

This regime, initially introduced by the Startups Act (Lei das Startups No. 21/2023), provides innovative startups with even more favorable tax treatment than that afforded to traditional SMEs.

The corporate income tax (IRC) schedule for certified startups

Reduced rate of 12.5%: This applies to the first €50,000 of taxable income (on the mainland). As a reminder, the reduced rate for a traditional SME is 15% on this same bracket.

Standard rate of 19%: The standard tax rate applies to profits exceeding 50,000 euros.

Regional benefit in Madeira: For startups registered and certified in the Autonomous Region of Madeira, this reduced rate drops to 8.75% on the first 50 K€ of profits.

Eligibility requirements

To qualify for this 12.5% rate, the company must hold official startup certification issued by the public agency Startup Portugal. The key cumulative criteria include:

• Having been in business for less than 10 years.
• Employing fewer than 250 people.
• Generating annual revenue of less than 50 million euros.
• Having its headquarters or a permanent representative office in Portugal.
• Demonstrating an innovative nature (e.g., investments in R&D, incubation, or a highly scalable business model).

A special, favorable corporate income tax (IRC) rate for certified startups in Portugal will remain in effect in 2026.

This regime, initially introduced by the Startups Act (Lei das Startups No. 21/2023), provides innovative startups with even more favorable tax treatment than that afforded to traditional SMEs.

The corporate income tax (IRC) schedule for certified startups

Reduced rate of 12.5%: This applies to the first €50,000 of taxable income (on the mainland). As a reminder, the reduced rate for a traditional SME is 15% on this same bracket.

Standard rate of 19%: The standard tax rate applies to profits exceeding 50 K€.

Regional benefit in Madeira: For startups registered and certified in the Autonomous Region of Madeira, this reduced rate drops to 8.75% on the first 50,000 euros of profits.

Eligibility requirements

To qualify for this 12.5% rate, the company must hold official startup certification issued by the public agency Startup Portugal. The key cumulative criteria include:

• Having been in business for less than 10 years.
• Employing fewer than 250 people.
• Generating annual revenue of less than 50 million euros.
• Having its headquarters or a permanent representative office in Portugal.
• Demonstrating an innovative nature (e.g., investments in R&D, incubation, or a highly scalable business model).

A special, favorable corporate income tax (IRC) rate for certified startups in Portugal will remain in effect in 2026.

This regime, initially introduced by the Startups Act (Lei das Startups No. 21/2023), provides innovative startups with even more favorable tax treatment than that afforded to traditional SMEs.

The corporate income tax (IRC) schedule for certified startups

Reduced rate of 12.5%: This applies to the first €50,000 of taxable income (on the mainland). As a reminder, the reduced rate for a traditional SME is 15% on this same bracket.

Standard rate of 19%: The standard tax rate applies to profits exceeding 50,000 euros.

Regional benefit in Madeira: For startups registered and certified in the Autonomous Region of Madeira, this reduced rate drops to 8.75% on the first 50 K€ of profits.

Eligibility requirements

To qualify for this 12.5% rate, the company must hold official startup certification issued by the public agency Startup Portugal. The key cumulative criteria include:

• Having been in business for less than 10 years.
• Employing fewer than 250 people.
• Generating annual revenue of less than 50 million euros.
• Having its headquarters or a permanent representative office in Portugal.
• Demonstrating an innovative nature (e.g., investments in R&D, incubation, or a highly scalable business model).

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