New IRC corporate tax rates in Portugal
Over the next three years, the general IRC (corporate income tax) rate is set to drop by 3 percentage points - a significant change for all companies in Portugal.
The evolution of the general IRC rate
In 2025, the general IRC rate applied to companies in Portugal is 20%. However, this is part of a gradual IRC reduction plan announced by the Government for the coming years, with effects starting in 2026.
According to this plan:
This path aims to give companies greater tax predictability, enabling better planning of activities and investments.
Special benefit for SMEs and Small Mid Caps
Small and medium enterprises, as well as small mid caps, continue to benefit from a more favourable framework, paying a lower IRC rate on the first €50,000 of taxable profit.
From 2026, this rate will be 15% - a clear incentive for the growth and reinvestment of Portuguese SMEs.
Practical impact: how much can you save?
For a company with €100,000 in taxable profit, the savings are concrete:
This represents a reduction of €1,000 to €2,000 compared to 2025, depending on the profit volume.
What does this mean for your company?
We are witnessing a progressive IRC reduction, from 20% in 2025 to 17% in 2028, with significant effects on the competitiveness of companies in Portugal. To make the most of these changes, it is essential to:
👉 Use our IRC Simulator to assess the impact on your company.
👉 See the full State Budget 2026 analysis for more details.
Need support with your company's tax planning? Talk to us - our tax consulting team helps you optimise your tax burden legally and strategically.
