Portugal: Reduction in corporate income tax rates from 20% to 17%

The corporate income tax rate will be reduced in stages.

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November 19, 2025

Portugal’s Parliament on November 7, 2025, approved a reduction in the statutory corporate income tax rate from 20% to 17%.

The corporate income tax rate will be reduced in stages, as follows:

  • 19% for tax periods starting in 2026
  • 18% for tax periods beginning in 2027
  • 17% for tax periods that commence on or after January 1, 2028

In the case of small or medium-sized enterprises or small-mid-cap companies, the corporate income tax rate on the first €50,000 of taxable income will be reduced from 16% to 15%, while a 17% rate will apply to income above that threshold, provided the company carries out agricultural, commercial, or industrial activities. The 15% rate will apply immediately to tax periods beginning on or after January 1, 2026. 

Read a November 2025 report prepared by KPMG’s EU Tax Centre

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