Portugal significantly drops corporate and income tax for 2026

Valerie Charoux
10 hours ago
2 min read

Financial News Portugal - Portugal significantly drops corporate tax to 19% and personal income tax to 15.7% for taxable income between 8,342.00-12,587.00 euros, in a new budget voted on November 27th, 2025. Here is the list of Portugal’s new tax measures for 2026:

Here is the list of Portugal’s new tax measures for 2026:

1 – Portugal’s corporate tax drops to 19% in 2026

2 - In the case of SMEs, Portugal’s corporate income tax applicable to the first €50,000 of taxable income drops to 15% in 2026

3 – Portugal’s Corporate Income Tax Code stipulates that autonomous taxation rates are increased by 10 percentage points for companies that report a tax loss in the fiscal year, unless they are in their first or second year of operation.

4 - The corporate income tax benefit for companies licensed to operate in the Madeira Free Trade Zone (ZFM) is at a rate of 5%, until December 31, 2033.

5 - The shareholders of companies licensed to operate in the Madeira Free Trade Zone are exempt from IRS (Personal Income Tax) or IRC (Corporate Income Tax), until December 31, 2033, on the profits made by these companies (with the exception of those resulting from transactions carried out with entities resident or domiciled in tax havens).

6 – Portugal's Personal income tax brackets in 2026 will be:

· 12.5% for taxable income of up to 8,342.00 euros

· 15.7% for taxable income between 8,342.00-12,587.00 euros

· 21.2% for taxable income between 12,587-17,838.00 euros

· 24.1% for taxable income between 17,838-23,089 euros

· 31.1% for taxable income between 23,089-29,397.00 euros

7 - Salaries up to 920 euros are exempt from income tax in 2026, as the minimum subsistence level in Portugal will be updated to 12,880 euros.

8 - The exemption from IMT (Property Transfer Tax), stamp duty, and fees on the purchase of a first home for young people up to 35 years old is extended up to 330,539 euros.