1 January 2026 · 2 min read
Corporate tax falls to 19%, and to 17% by 2028
The headline IRC rate is on a set path downwards. For investors holding Portuguese property through a company, the arithmetic of that choice is moving.
By ATLANTIC’s property tax team
Portugal’s general corporate income tax rate is 19% in 2026. It falls to 18% in 2027 and to 17% in 2028, under a reduction of one percentage point a year.
The rate applies on the mainland. Small and medium-sized companies pay 15% on the first €50,000 of taxable profit, with the balance at the general rate, and that reduced rate falls to 12.5% for companies in the interior. In the Azores and Madeira the general rate is 13.3%.
Two additional charges sit on top and are easy to forget when comparing headline rates. Municipal surcharge adds up to 1.5% of taxable profit, at the rate each council sets. State surcharge applies progressively, from 3% to 9%, on taxable profits above €1.5 million.
For a non-resident investor, the relevant question is rarely the rate on its own. Holding property through a company changes how rental income is taxed, what can be deducted, how a future sale is treated, and what happens when value is taken out. A falling corporate rate improves one line of that calculation. It does not settle it.
What the trajectory does offer is something this market rarely gets: a known direction for three years. Decisions that depend on the rate can now be modelled rather than guessed.
Key takeaways
- The general IRC rate is 19% in 2026, 18% in 2027 and 17% from 2028.
- SMEs pay 15% on the first €50,000 of taxable profit; 12.5% in the interior.
- Municipal and state surcharges apply on top and can change the comparison.
Source: Orçamento do Estado para 2026.
The background
Download the 2026 Property Tax Guide
This article provides general information and does not constitute tax advice.