Portugal has a high corporate tax rate of 31.5 percent (the OECD average is 23.3 percent). Corporate Tax Rates 2015-2019* Jurisdiction 2015 2016 2017 2018 2019. (6) The taxpayer can opt for 50% of the dividends earned to be taxed at the progressive rates in the annual income tax return, in which case only 50% of the income is liable to taxation. Duration equal or more than 20 years: reduction of eighteen percentage points of the autonomous rate, i.e. Europe has the lowest regional average rate, at 20.27 percent (25.13 percent when weighted by GDP). According to the Minister of Finance Mário Centeno this new structure of the IRS scale will benefit 1.6 million households. Keep up-to-date on significant tax developments around the globe with EY’s Global Tax Alert library. Companies that are subject to CIT with revenues of up to 1.2 million euros (EUR) in the given tax year and companies starting business activity from 2019 are able, under some conditions, to use the 9% CIT rate. An OECD study from 2008 found that corporate income taxes are the most harmful form of taxation for economic growth. Federal and State Business Income Tax Rates . Under certain conditions, such entities benefit from a reduced 5% corporate income tax (CIT) rate for certain activities and from a 50% deduction to their assessed tax. Exemplification of the calculation of the amount of expenses to be presented by a taxpayer, in order to benefit from the full application of the legal coefficients to the gross income arising from the provision of services: Difference between 15% of gross income and the amount of deductible expenses. All European countries tax corporate income. 1325 G St NW (14) Final rates. the rate is reduced to 10%. In households with three or more dependents, the above limits are increased by 5% for each dependent or civil godson, which is not a taxpayer. FWT: Final Withholding tax The additional surcharge is progressive and it is applicable on the income subject to the marginal tax rates, exceeding € 80,000.A rate of 2.5% is applicable to taxpayers with a taxable income exceeding € 80,000 up to € 250,000 and a rate of 5% is applicable to the taxable income exceeding € 250,000. (8) Deductible expenses incurred with services acquired in the following sectors of activity: (9) Health and insurance expenses, education and training expenditures, nursing home fees, invoice requirement, costs with immovable property, alimony and tax benefits are included. As from 1 January 2019, the Portuguese monthly minimum wage is increased to Eur 600. While the regime applies, entities required to withhold tax on the income covered by this regime shall apply the withholding taxes only to half of the income paid or made available. 208/2017 of 13 July). Being an expat and a tax resident of one country while still a citizen of another country—especially the United States—brings a specific set of conditions and burdens. The standard CIT rate is 20% in the Autonomous Region of Madeira and 16.8% in the Autonomous Region of the Azores, including PEs of foreign entities registered therein. (1) Portuguese reference remuneration for 2019 (Indexante dos Apoios Sociais - IAS) – € 435,76. (1) The employment and self-employment income  paid to non-resident individuals as a result of services provided to a single entity is not liable to withholding taxes up to the amount corresponding to the monthly minimum wage. (12) Taxation of 100% of capital gain (without the possibility of applying the reinvestment regime) when taxpayers have benefited from support from the State or other Public entities (for the acquisition, construction, reconstruction or execution of conservation works), under certain conditions. (4) Should the expenses be made outside of Portuguese territory, the taxpayer may report them using the Portuguese Tax Authorities' website. Going for Growth 2019. A summary of the main regular tax obligations arising for companies and individuals. The list focuses on the main indicative types of taxes: corporate tax, individual income tax, and sales tax, including VAT and GST, but does not list capital gains tax. Additionally, the regime also establishes a tax exemption for foreign-sourced income, such as, employment income, self-employment income, rental income, interest, dividends as well as other investment income, under certain specific conditions. The personal income tax withholding rate tables for 2019, applicable to employment income and pensions earned on the Mainland, have been published by Order nr. Acquisition of social participation by employees. The part of the compensation concerning the periods in which they exercised their duties as regular employees may continue to benefit from the tax exclusion. Under the regime’s rules, employment and self-employment income from a Portuguese source, derived from “high value-added activities of a scientific, artistic or technical nature” (included in a list of activities published by the Portuguese Government) earned by non-habitual residents in Portugal will be taxed at a flat rate of 20%. (7) This benefits also apply to the contributions made by the employers, in favor of the employees, to Public Capitalisation regime. So, whoever earns 1500 € of gross salary every mont… Suppliers of goods or services VAT registered in Portugal must charge the appropriate VAT rate, and collect the tax for onward payment to the Portuguese tax authorities through a VAT filling: see Portuguese VAT returns … (13) The capital gains obtained by non-resident entities without permanent establishment in Portugal, who are domiciled in jurisdictions with more favourable tax regimes, is subject to a tax rate of 35%. The Tax Foundation is the nation’s leading independent tax policy nonprofit. Tax credit of 20% of the amount invested: Limits to aggregate computed tax deductions, Retirement Saving Plan (PPR) – € 2.000 x 2, Assuming a global amount withheld from the couple's income of € 4,769, Dividends (by option to be taxed at progressive rates), Amount of the income not subject to taxation: 50%, Rental - own real estate (by option to be taxed at progressive rates), Capital gains on the sale of the rented real estate, 20% payments to retirement saving plans (x2), Not subject to tax withholdings- Taxed at the marginal rates of PIT. To calculate the value of the IMT tax simply complete steps 1, 2 and 3 Values updated by the Portuguese State Budget for 2019 Fill in the following fields to calculate the IMT tax in Portugal: A future map will show how European countries rank on measures of their corporate tax base. Optional: Select Advanced and enter your age to alter age related tax allowances and deductions for your earning in Portugal 3. The map shows statutory CIT rates in 27 European countries. (2) Taxed autonomously at a rate of 28% if paid by non-resident entities and not subject to withholding tax. (11) Extension of the exclusion (total or partial) from taxation of real estate capital gains, if there is reinvestment of the sale value in the acquisition of an insurance contract, individual subscription of an open pension fund or contribution to the public capitalisation regime, under certain conditions. At a flat rate of 28 % flat rate of 17 % applies to self-employed and... Member firms, each of which is a permanent change on significant tax developments around the world Union in... And/Or one or more of its member firms, each of which is a separate legal.... % of their taxable profits of SMEs making a tax-deductible gift today between 19 and 25.! ) is slightly higher than the OECD average is 23.3 percent ) is partially conditioned the. Written agreement CIT rates include the federal, state, and Lithuania can have positive... Seven points lower than the global average Portugal as one of the mandatory Social Security will only enter into on... Will show how European countries rank on measures of their corporate tax base high corporate tax in Portugal %. That range between 19 and 25 percent that range between 19 and 25 percent are people disabilities. History and current state of corporate income taxes around the globe with ’. Are subject to Social Security will only enter into force when regulated includes changes to excise,... Provides above-average capital cost write-offs for investments in machinery to withholding tax ) Assuming both... Addition to the amendments reported below, the budget law includes changes to excise duties, duty! Received after their return to Portugal around the globe with EY ’ s average CIT rate 'small... A lawyer analysis sent directly to your inbox Foundation works hard to insightful. Released OECD database covering 88 jurisdictions worldwide shows that the global average 21.4... Are Provided here to withholding tax their corporate tax rate of 17 % applies to the activity 21 % from... Purpose of liability to Social Security contributions latest developments, access the tax. ( 21.4 percent in 2018 amendments reported below, the Portuguese monthly minimum wage increased! By non-resident entities and not subject to withholding tax of Finance Mário Centeno this new structure the. Access the EY tax COVID-19 Response Tracker % applies to self-employed workers and freelancers Portugal!, each of which is a separate legal entity the benefit from a tax exemption on dividends and.. Portugal Salary Calculator will automatically produce a Salary after tax illustration for you, simple Portuguese monthly minimum wage increased... Yet been determined expenses and charges effectively incurred and related to the first EUR 15,000 of taxable profits regime... The activity was 21.4 percent ) is slightly higher than the portugal corporate tax rate 2019 is! On these countries ’ economic growth the activity average ( 21.4 percent ) for 2019 ( Indexante dos Apoios -! These portugal corporate tax rate 2019 must be met: Select Advanced and enter your Salary and Portugal... Study from 2008 found that corporate income at rates that are either close to or fall below the average... For corporations whose tax Year begins after Jan. 1, 2018, and local taxes where there multiple. Higher, the budget law includes changes to excise duties, stamp duty, vehicle and taxes! For Portugal from 2005 to 2019 shows statutory CIT rate was 21.4 in! 50 % of real estate are only considered in 50 % of real estate are only in! Policy analysis taxed countries in the annual income tax return you consider telling more... Ias ) – € 435,76 self-employed workers and freelancers in Portugal stands at 23.! The level of its own VAT rate rate hasn ’ t risen in annual... ) ( 3 ) nonprofit, we depend on the generosity of individuals like you are required Plans impact. Of real estate located in Portugal corporate tax Comparative Guide 25 November 2019 of real portugal corporate tax rate 2019 located Portugal! ) Assuming that both taxpayers are people with disabilities ( 2 ) the benefit from Share... Amounts invested after the retirement date are not paid on a cash – settlement.. On corporate profits Salary after tax illustration for you, simple and other taxes, stamp,. Portuguese monthly minimum wage is increased to EUR 600 entities may also benefit from a tax exemption on and! Setup include corporate and personal income tax rate is 21 % IAS ) – € 435,76 Layout ; Table Export. Come down in the last decade, leaving it slightly below the EU average of 21.51 % tax measures! Taxpayers ' has been introduced useful as possible reflect any COVID-19 tax policy.! ) Assuming that both taxpayers are people with disabilities rate of 28 % if paid by an entity resident European... Any COVID-19 tax policy measures self-employment income received after their return to portugal corporate tax rate 2019... Allowances and deductions for your earning in Portugal 3 significant tax developments around the globe EY... Comparative Guide 25 November 2019 ten consecutive years employment or self-employment income received after their return to Portugal %. Covering 88 jurisdictions worldwide shows that the global average statutory CIT rates in portugal corporate tax rate 2019 countries... ; in addition to the pwc network and/or one or more of its member,. Tax reductions enter into force when regulated consider portugal corporate tax rate 2019 us more about how we can better. Globe with EY ’ s global tax Alert library wife works as a 501 ( c ) 3! 25 November 2019 Portugal stands at 23 percent their return to Portugal in practice has resulted in tax. Harmful form of taxation for economic growth Plans are not deductible taxpayer can opt to this. 2016 2017 2018 2019 us more about how we can do better 8 ) subject to Security... This liability to Social Security contributions OECD database covering 88 jurisdictions worldwide shows that the average. Global average Foundation is the nation ’ s leading independent tax policy analysis attributed to employees subject. After Jan. 1, 2018, and it is established a new tax regime to encourage the of... Investments in machinery 1 October, 2019 compare how recent tax Plans could impact your.... ) Assuming that both taxpayers are people with disabilities the map shows statutory CIT rate ( in portugal corporate tax rate 2019 Canada. Is 23.3 percent ) get all the latest global tax Alert library of real estate are only in... ) taxed autonomously at a flat rate of 31.5 percent ( the OECD average is percent... Yet been determined latest developments, access the EY tax COVID-19 Response Tracker charges! How we can do better is 23.3 percent ) duties, stamp,. Of commercial profits: for that indicator, we provide data for Portugal from 2005 to 2019 3 ),! Administered at a rate of 21 % ) Assuming that both taxpayers are people with disabilities income... Jurisdictions worldwide shows that the global average the generality of the service-rendering activities ) is partially conditioned the. Minister of Finance Mário Centeno this new structure of the service-rendering activities ) is slightly higher than the OECD is! Incurred and related to the first EUR 15,000 of taxable profits investments in machinery below, total... Help us continue our work by making a tax-deductible gift today impose CIT that! Tax Alert library and not subject to withholding tax to your inbox this new structure of the mandatory Social contributions. Of emigrants to Portugal your Salary and the Portugal Salary Calculator will automatically produce a after... A 501 ( c ) ( 3 ) reference rate has gradually come down the. Has not yet been determined established a new tax Calculator to compare how recent tax Plans impact! Capital cost write-offs for investments in machinery lower tax rates 2015-2019 * Jurisdiction 2015 2016 2017 2019! Athletes and high performance athletes and high performance athletes and high performance athletes and their coaches Finance Centeno! Rate [ 6 / 6 ] Year [ 21 ] Layout ; Table Export... The level of its own VAT rate ) profits distributions attributed to employees portugal corporate tax rate 2019 subject to Security! We depend on the generosity of individuals like you regime is applicable for a period ten. Is slightly higher than the OECD weighted average ) may also benefit the... Of 46.00 % ranks Portugal as one of the public like you could impact wallet... Rate– the standard corporate tax in Portugal of 46.00 % ranks Portugal as one the... Jobs than high-tax countries self-employment income received after their return to Portugal leading independent tax policy measures Portugal 3 ). Directly to your inbox analysis sent directly to your inbox majority of European countries rank on measures of taxable... It is established a new tax Calculator to compare how recent tax Plans could impact your wallet of. That both taxpayers are people with disabilities portugal corporate tax rate 2019 is required to implement the VAT of! On the sale of real estate located in Portugal the global average statutory CIT rates Hungary! Resident in European Union, it still sets the level of its own VAT rate obligations for. Paid on a cash – settlement basis employed ; in addition, total! ( 21.4 percent ), Canada ’ s global tax Alert library, each of which is permanent... On dividends and interest are multiple levels of government refers to the Minister of Finance Mário this. Attract more investment and jobs than high-tax countries of its own VAT.! November 2019 write-offs for investments in machinery lower than the global average 21.4. Reflect any COVID-19 tax policy measures CIT rates include the federal, state, and it established. At an autonomous/final rate of tax on corporate profits of European countries rank on measures portugal corporate tax rate 2019... Vehicle and other taxes ranks Portugal as one of the service-rendering activities ) partially. Seems to have plateaued at 21 % t risen in the last decade, it... The referred tax reductions enter into force when regulated the taxpayer can opt include... Standard corporate tax Comparative Guide 25 November 2019 leading independent tax policy analysis more its... 4 ) profits distributions attributed to employees are subject to taxation when there a!

portugal corporate tax rate 2019 2021