Portugal’s corporate tax to fall to 17% by 2029. Government approves proposal this Friday
The proposal was included in the government's programme, as was the 15% rate on the first 50,000 euros of taxable profit for medium-sized companies.
The government is going ahead with a reduction in corporate income tax to 19% next year, reaching 17% by the end of the legislative term, as set out in the Government Programme. The measure will be approved this Friday in the Council of Ministers, the Prime Minister announced during the State of the Nation debate.
“The Council of Ministers will approve this Friday the lowering of the corporate income tax to 19% in 2026, 18% in 2027 and 17% in 2028”, said Luís Montenegro during the opening speech of Thursday’s debate in Parliament.
The government leader also clarified that for small and medium-sized companies, in 2026, the rate will drop to 15% for the first 50,000 euros of taxable income. Both measures were included in the economic programme that the AD – PSD/CDS-PP Coalition took to the legislative elections in May.
Luís Montenegro also emphasised that there are “around 500,000 companies” paying IRC and therefore benefiting from the measures.
The proposal by the AD – PSD/CDS coalition to reduce IRC across the board by three percentage points, from 20% to 17%, and to lower the rate from 16% to 15% for the first 50,000 euros of taxable profit, by the end of the parliamentary term, is expected to cost around one billion euros, a loss of revenue that will be supported by economic growth and the containment of current primary expenditure, according to the government’s accounts.
In an interview with ECO, the Minister of Finance, Joaquim Miranda Sarmento, estimated that the reduction in corporate income tax, realised through a reduction of one percentage point per year, would have an estimated cost of between 200 and 250 million euros each year.
