Portugal: Reduction in corporate income tax rates from 20% to 17%
The corporate income tax rate will be reduced in stages.
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