Corporate Tax in Portugal (2026): IRC Rates for an Lda.

Portugal has been cutting its corporate tax rate year by year. Here is what an Lda. pays in 2026 and the obligations that come with it.

IRC rates in 2026

An SME follows the EU definition: broadly, fewer than 250 employees and annual turnover up to €50 million (or a balance sheet up to €43 million). Most new Lda.s qualify.

Further reduced rates exist for companies operating in Portugal's designated interior regions and for certified startups (12.5% on the first €50,000) — see our guide to the 12.5% interior and startup rate. Madeira and the Azores have their own rates.

The standard rate is scheduled to keep falling — to 18% in 2027 and 17% in 2028 — under the reduction path approved by Parliament.

Surcharges (derramas)

On top of IRC, two surcharges may apply to taxable profit:

• Municipal surcharge (derrama municipal) — set by each municipality, up to 1.5%. Many municipalities apply lower rates or exemptions for small companies.
• State surcharge (derrama estadual) — only on profits above €1,500,000: 3% up to €7.5 million, 5% up to €35 million and 9% above that.

Autonomous taxation

Some expenses are taxed separately even when the company makes a loss — for example certain company car costs, entertainment expenses and undocumented expenses. Keeping clean records with your accountant keeps these low.

Taking money out: salary or dividends

Profit belongs to the company. To pay yourself you can:

• Pay a salary as manager. It is a deductible cost for the company, but it's subject to personal income tax (IRS) at progressive rates and to Social Security contributions from both the company and you.
• Distribute dividends from after-tax profit. Dividends paid to Portuguese-resident individuals are taxed at a flat 28% (they can opt to include them in their income at progressive rates). Dividends paid to non-residents may benefit from a reduced rate under a double tax treaty.

The right mix depends on your personal tax residence and profit level — worth modelling with your accountant before your first year end.

VAT

Most Lda.s charge VAT (IVA). The standard mainland rate is 23%, with reduced rates for some goods and services. VAT returns are filed monthly or quarterly depending on turnover.

Key annual deadlines

All of this is filed by your company's certified accountant.

Example

An SME with €80,000 of taxable profit in 2026 pays roughly €50,000 × 15% + €30,000 × 19%, before any municipal surcharge. Your accountant will adjust for deductions, tax benefits and autonomous taxation.