Portugal stays 33rd in OECD tax competitiveness index
Portugal posted one of the biggest score gains in the OECD tax competitiveness index, but remained 33rd, underlining persistent concerns over tax rates and complexity.
Portugal remained 33rd out of 38 OECD countries in the 2026 International Tax Competitiveness Index, despite recording the third-largest score increase, according to the latest Tax Foundation report. The result suggests that while some tax changes have improved the system’s design, Portugal still ranks among the least competitive tax regimes in the OECD.
Portugal’s score rose to 59.6 from 58.4, with only the Czech Republic and Iceland posting larger gains. The report, produced by the Tax Foundation with support in Portugal from Instituto +Liberdade, said the improvement reflected a gradual cut in the top combined corporate tax rate, including surtaxes, from 31.5% in 2024 to 30.5% in 2025 and 29.5% in 2026. It also highlighted a stronger tax incentive for corporate capitalisation introduced in 2025.
Even so, Portugal remained near the bottom of the corporate tax ranking, at 34th place. The report pointed to the still high top rate, surtaxes that limit the use of loss carryforwards, and the complexity of tax incentives. Portugal ranked 35th in that last subcategory, although it placed eighth for rules allowing companies to deduct investment costs.
In other areas, Portugal ranked 19th for personal income taxation, with the report flagging a 53% top personal income tax rate, including the solidarity surcharge, and no cap on social security contributions. It placed 19th in property taxes, 21st in consumption taxes and 33rd in international tax rules. The index uses 43 variables to assess the competitiveness and neutrality of tax systems, focusing on tax structure rather than the overall tax burden paid by households and businesses.
Originally published at Eco.pt
