10 Tips to Save on Corporate Tax in 2026: A Practical Guide Under Portuguese Tax Law
Introduction
The year 2026 brings a significant set of tax changes that directly impact Portuguese companies. With the approval of the 2026 State Budget (Law No. 73-A/2025, of December 30) and Law No. 64/2025, of November 7, which gradually reduced corporate tax rates, companies now have new opportunities to optimize their tax burden in a legitimate and structured way.
The general CIT rate has dropped to 19% (from 20% in 2025), and SMEs benefit from a 15% rate on the first €50,000 of taxable income. Additionally, various tax incentives such as RFAI, SIFIDE and ICE remain essential tools for reducing the tax effectively paid.
In this article, we present 10 practical tips, based on current legislation, to help your company save on corporate tax in 2026.
Summary of 2026 CIT Rates
| Entity Type | 2025 Rate | 2026 Rate |
|---|---|---|
| General Rate | 20% | 19% |
| SME / Small Mid Cap (up to €50,000) | 16% | 15% |
| Non-resident entities | 25% | 25% |
The 10 Tips
1. Take Advantage of the New 15% Reduced Rate for SMEs
In 2026, SMEs and small-medium capitalization companies (Small Mid Cap) benefit from a reduced CIT rate of 15% on the first €50,000 of taxable income, down from the previous 16%. The excess is taxed at the general rate of 19%. Check whether your company meets the SME or Small Mid Cap criteria to access this advantage.
Legal basis: Art. 87(2) of the CIT Code (as amended by Law No. 64/2025, of November 7). Make sure your SME certification is up to date with IAPMEI.
2. Use the RFAI - Tax Regime for Investment Support
The RFAI allows companies to deduct from CIT liability up to 25% of investments made in tangible and intangible fixed assets used in productive activities (up to €5 million), in the North, Centre, Alentejo and Autonomous Regions. For the Algarve and Greater Lisbon, the rate is 10%. The RFAI has been extended until 2027, making 2026 a key year for planning investments.
Legal basis: Art. 22 of the EBF and Decree-Law No. 162/2014. The deduction can be carried forward for up to 10 tax years due to insufficient tax liability.
3. Apply for SIFIDE II - R&D Incentives
SIFIDE II allows companies to deduct from CIT liability up to 82.5% of R&D expenses. The base rate is 32.5% of the period's expenses, plus 50% of the increment over the average of the 2 previous tax years (up to €1.5 million). The direct SIFIDE has been extended until the end of 2026.
Legal basis: Tax Investment Code, art. 35 et seq. The indirect SIFIDE (investment funds) ended in 2026. The tax credit can be carried forward for up to 8 tax years (12 for investments from 2024 onwards). Application via ANI.
4. Strengthen Equity with the ICE
The Tax Incentive for Business Capitalization (ICE) allows companies to deduct from taxable income a percentage of net increases in equity. The deduction rate is indexed to the 12-month Euribor plus 2 percentage points, with an additional 0.5 p.p. for SMEs and Small Mid Caps. The deduction applies over 10 tax years.
Legal basis: Art. 43-D of the EBF. The ICE replaced the former DLRR and RCCS. Simply fill in Box 7 of the Modelo 22 - no formal application required.
5. Optimize Autonomous Taxation with Electric Vehicles
100% electric vehicles are exempt from autonomous taxation if the acquisition cost does not exceed €62,500 (above this value, the rate is 10%). Plug-in hybrids approved under the Euro 6e-bis standard with emissions below 80 gCO₂/km pay reduced rates of 2.5%, 7.5% or 15%, depending on acquisition cost.
Legal basis: Art. 88 of the CIT Code, as amended by the 2026 State Budget. Choosing electric vehicles for the business fleet is one of the most effective ways to reduce autonomous taxation costs. Learn more in our article on autonomous taxation of hybrid vehicles in 2026.
6. Suspension of Autonomous Taxation Surcharge in Case of Losses
In 2026, the suspension of the 10 percentage point surcharge on autonomous taxation for companies with tax losses is maintained, provided the company had taxable profit in one of the 3 previous tax years and timely filed the Modelo 22 and IES declarations for the 2 previous years.
Legal basis: Art. 88(14) of the CIT Code (suspension renewed in the 2026 State Budget). This rule also applies to the start-up period or the two following tax years.
7. Increase Telework Expense Deductions (110%)
Expenses borne by employers for additional telework compensation are now considered at 110% of their value when classified as social utility expenditures. This allows an additional 10% deduction over the amount actually spent.
Legal basis: Art. 43 of the CIT Code (social utility expenditures), as amended by the 2026 State Budget. The overall limit is 15% of personnel costs.
8. Take Advantage of the Salary Valorization Tax Incentive
Companies that increase the average annual base pay by at least 4.6% (in 2026), under a dynamic collective agreement entered into or updated less than 3 years ago, can increase salary costs by 50% for CIT purposes. Additionally, productivity bonuses are exempt from IRS and social security contributions up to 6% of annual base pay.
Legal basis: Art. 19-B of the EBF (as amended by Law No. 65/2025). In 2026, the requirement to reduce the salary range was eliminated.
9. Plan Donations with Tax Relevance
Donations made to entities whose activity predominantly covers social, cultural, environmental, scientific, technological, sports or educational areas are accepted as tax-deductible expenses, with increases ranging from 120% to 150% of the donated amount, depending on the nature of the beneficiary entity.
Legal basis: Art. 62 et seq. of the EBF (Patronage Statute). The benefit has been extended until 31/12/2026.
10. Combine Benefits and Plan Ahead
Effective tax planning involves combining multiple benefits (RFAI + SIFIDE + ICE, for example), while respecting legal cumulation limits. The Modelo 22 for 2025 must be filed by May 2026 - there is still time to review investments made and maximize deductions. The general CIT rate will continue to fall: 18% in 2027 and 17% in 2028.
Recommendation: Involve your accounting and tax advisory team as early as possible. Document all eligible investments and keep your tax files organized.
Conclusion
The 2026 tax framework offers multiple opportunities for companies to reduce their CIT burden. The continued rate reduction, combined with a robust set of tax incentives for investment, R&D and capitalization, allows for strategic tax planning that can generate substantial savings.
However, it is essential that all tax optimization strategies are implemented in strict compliance with the law, with adequate documentation and professional guidance. Grupo Your is at your disposal to support you in this process and ensure your company makes the most of the legal opportunities available.
This article is for informational purposes only and does not replace consultation of applicable legislation or professional tax advice. The information refers to legislation in force as of February 2026 and may be subject to change. Contact us for a personalized analysis of your company's situation.
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