At YOUR Group, we know that tax obligations are one of the biggest concerns for Portuguese managers and entrepreneurs. That is why we have prepared this practical guide on Corporate Income Tax (IRC) in Portugal for the 2026 fiscal year, so your company can make the best decisions with clear and up-to-date information.
One of the most frequent questions our clients ask is: "Does the IRC rate change depending on the district where my company is based?" The answer is: on the Mainland, no, the base rate is national. But there are very significant differences between Portugal's three major territories:
| Mainland Portugal | Madeira | Azores | |
|---|---|---|---|
| General Rate 2026 | 19% | 13.3% | ~13.3% |
| SME Rate (first 50k EUR) | 15% | 10.5% | - |
| Micro/SME special rate | 12.5% (interior) | 10.5% | 8.75% |
| Free Zone / Special benefit | - | 5% (CINM) | - |
Source: State Budget 2026 (Law No. 73-A/2025, December 30); RAM Budget 2026; RAA Budget 2026.
The location of the tax residence (or effective management) determines the IRC rate your company pays. If you have doubts about the most advantageous regime for your situation, the YOUR Group team is available to advise you.
Mainland Portugal
General IRC Rate
For the 2026 fiscal year, the general IRC rate applicable to resident entities engaged in commercial, industrial or agricultural activities, and to non-residents with a permanent establishment in Portugal, is 19%. This 1 percentage point decrease from 2025 (20%) is part of the trajectory set by the Government.
Reduced Rate for SMEs and Small Mid Caps
Small and Medium Enterprises (SMEs) and Small Mid Cap companies benefit from a reduced rate of 15% on the first EUR 50,000 of taxable income. The excess is taxed at the general rate of 19%.
Autonomous Region of Madeira (RAM)
Madeira has fiscal autonomy and applies IRC rates significantly lower than those on the Mainland. The general rate is 13.3%, with reduced rates of 10.5% for SMEs and 8.75% for micro enterprises.
Madeira Free Zone (CINM)
The Madeira International Business Centre (CINM) offers one of the most attractive tax regimes in the European Union with a 5% IRC rate for licensed companies until 31/12/2033.
Autonomous Region of the Azores (RAA)
The Azores apply a 30% reduction compared to national IRC rates. The general rate is 13.3% and micro/SMEs benefit from a special rate of 8.75%.
Autonomous Taxation
| Type of Expense | Normal Rate | With Losses |
|---|---|---|
| Undocumented expenses | 50% | 60% |
| Travel allowances and mileage (not invoiced) | 5% | 15% |
| Vehicle expenses (acquisition value up to 27,500 EUR) | 10% | 20% |
| Vehicle expenses (27,500 to 35,000 EUR) | 27.5% | 37.5% |
| Vehicle expenses (over 35,000 EUR) | 35% | 45% |
| Entertainment expenses | 10% | 20% |
Key Tax Benefits in IRC (2026)
- RFAI: Investment Support Tax Regime with deductions of 10% to 25% on tangible and intangible assets
- DLRR: Deduction for Retained and Reinvested Profits, 10% deduction up to EUR 12M
- SIFIDE: R and D Tax Credit with 32.5% to 82.5% deductions on R and D expenses
- Employment Creation: 50% increase on costs for new permanent positions
- Remote Work (New 2026): 110% deduction on telework compensation expenses
IRC Fiscal Calendar 2026
| Date | Obligation | Notes |
|---|---|---|
| May 31 | Model 22 Submission (IRC) | Previous year income declaration |
| May 31 | IRC Payment | If tax is due |
| July 31 | 1st Payment on Account | Approx. 25% of previous year IRC |
| July 15 | IES Submission | Simplified Business Information |
| September 15 | 2nd Payment on Account | Approx. 25% of previous year IRC |
| December 15 | 3rd Payment on Account | Approx. 50% of previous year IRC |
| December 31 | Fiscal Year End | End of normal taxation period |
Global Comparison Table (IRC 2026)
| Regime / Territory | General Rate | SME Rate (first 50k EUR) | Micro Special Rate | Max State Surcharge |
|---|---|---|---|---|
| Mainland (General) | 19% | 15% | - | 9% |
| Mainland (Interior) | 19% | 12.5% | - | 9% |
| Madeira (General) | 13.3% | 10.5% | 8.75% | 6.3% |
| Madeira (Free Zone / CINM) | 5% | 5% | 5% | - |
| Azores (General) | 13.3% | - | 8.75% | 7.2% |
This guide was prepared by YOUR Group based on legislation in force as of April 2026 and is for informational purposes only. It does not replace specialised tax or legal advice tailored to your specific situation.
