Corporate income tax: what is it, how do you calculate it and when do you pay it?

Resposta rápida: em 2026, a taxa normal de IRC é de 19% sobre a matéria coletável. As PME e as Small Mid Cap pagam 15% sobre os primeiros 50.000 € e 19% sobre o resto. A isto podem somar-se a derrama municipal (até 1,5%), a derrama estadual (de 3% a 9% sobre o lucro tributável acima de 1,5 milhões de euros) e a tributação autónoma. A declaração Modelo 22 entrega-se até ao último dia de maio do ano seguinte. Artigo atualizado em outubro de 2026.

What is Corporate Income Tax?

Corporate Income Tax (IRC) is a tax levied on the profits of organizations with commercial, industrial or agricultural economic activity in Portugal. This tax is also applied to income earned in Portuguese territory by foreign companies.

The IRC aims to tax companies' profits, i.e. the positive difference between the income earned and the costs and expenses incurred during a given period of time. It is a direct tax, i.e. it is levied directly on companies and not on end consumers.

If you've read other articles and found yourself confused, in this article you'll find everything you need to know about the subject in a practical and simple way.

Types of Entities Subject to Corporate Income Tax

In addition to companies, there are various types of entities that are subject to corporate income tax:

• Associations;
• Foundations;
• Cooperatives;
• Among others.

Entities that are not legally considered legal persons but have autonomous assets or income aimed at making a profit may also be subject to IRC.

Como funciona o IRC e que lei o regula?

O IRC é regido pelo Código do IRC, aprovado pelo Decreto-Lei n.º 442-B/88 e revisto a fundo pela reforma da Lei n.º 2/2014. A alteração mais recente às taxas veio com a Lei n.º 64/2025, que baixa a taxa normal um ponto por ano até 2028.

O imposto incide sobre o lucro de cada ano e é declarado no ano seguinte, na declaração anual de IRC (Modelo 22). A Modelo 22 é submetida por transmissão eletrónica de dados até ao último dia de maio. Em 2026, para os rendimentos de 2025, o Governo prorrogou esse prazo até 30 de junho.

Who pays corporate income tax in Portugal?

Corporate Income Tax (IRC) must be paid by entities that carry out economic activities in Portugal, in all their different forms. As established in Article 3 of the IRC Code, the following are subject to the payment of income tax:

• Companies resident in Portugal that carry out a commercial, industrial or agricultural activity as their main source of income are subject to IRC.

• Resident companies that do not carry out activities in these areas as their main activity: some entities resident in Portugal may not carry out a commercial, industrial or agricultural activity as their main activity, but they are still subject to IRC. This group can include service companies, consultancies, digital service providers, among other types of activity.

• Non-resident entities earning income in Portugal, even without a permanent establishmentNon-resident entities, i.e. those that do not have a tax residence in Portugal, can also be subject to IRC if they obtain income in Portuguese territory as a result of their activity. This income can come from various sources, such as:
  
  
  • Property rental;
  • Provision of services;
  • Royalties;
  • Among others.

• Non-resident entities with a permanent establishment in PortugalFinally, non-resident entities that have a permanent establishment in Portugal are also subject to IRC. A permanent establishment can be one of the following:
  
  
  • Subsidiary;
  • Branch;
  • Office;
  • Factory;
  • Or any permanent place where the entity carries out economic activity in Portugal. Yes: you are subject to IRC!

How much corporate income tax do you pay?

Em 2026, a taxa normal de IRC é de 19%, aplicada sobre a matéria coletável da empresa (o lucro tributável depois de deduzidos os prejuízos e os benefícios fiscais). Com a Lei n.º 64/2025, a taxa desce para 18% em 2027 e para 17% a partir de 2028, como já prevê o artigo 87.º do Código do IRC.

Taxable profit is determined by subtracting deductible costs and expenses from the total income earned by the company.

e.g. Taxable profit = Income - (Costs + Deductible Expenses)

No entanto, é importante destacar que existem algumas exceções à taxa normal de 19%:

• Taxa de 15% sobre os primeiros 50.000 € de matéria coletável das PME e das empresas de pequena-média capitalização (Small Mid Cap);
  
  
• Taxa de 12,5% sobre os primeiros 50.000 € para as startups reconhecidas como tal e para as empresas que exercem a atividade nos territórios do interior, cumpridas as condições da lei;
  
  
• E, se o lucro tributável for superior a 1.500.000 €, acresce a derrama estadual, de 3% a 9% consoante o escalão.

A derrama estadual é progressiva e aplica-se por escalões do lucro tributável:

• 3% sobre a parte entre 1,5 e 7,5 milhões de euros;
  
  
• 5% sobre a parte entre 7,5 e 35 milhões de euros;
  
  
• E 9% sobre a parte que exceder 35 milhões de euros.

Por exemplo, se o lucro tributável de uma empresa for de 2.000.000 €, a derrama estadual de 3% incide apenas sobre os 500.000 € que excedem 1.500.000 €, o que dá 15.000 €. Vamos voltar ao tema da derrama estadual mais à frente neste artigo.

How is corporate income tax calculated?

Calculating corporate income tax is a process with several steps and concepts involved. We'll explain each of them so that you can understand how the amount of corporate income tax to be paid by a company is determined:

1 - Taxable Profit

Taxable Profit is the first concept that must be understood: it is the difference between the income obtained from the company's activity and the expenses incurred.

Income includes all the revenue generated by the company, while expenses represent the expenses necessary for the operation of the company, such as:

• Wages
• Expenditure on raw materials
• Renting premises
• Among others

É importante destacar que nem todas as despesas são dedutíveis para fins de cálculo do lucro tributável: existem regras específicas sobre as despesas que a empresa pode deduzir.

2 - Collectible Matter

For tax purposes in Portugal, the taxable amount is determined by simple arithmetic: the amount of taxable profit, minus tax benefits and tax losses that can be deducted. Confused?

• These benefits are incentives granted by the state to encourage certain activities or behaviors by companies;

• E os prejuízos fiscais referem-se a anos anteriores em que a empresa teve prejuízos e que podem ser usados para reduzir o lucro tributável de anos seguintes. Desde 2023, podem ser deduzidos sem limite de anos, mas só até 65% do lucro tributável de cada ano.

3 - Corporate Income Tax

Depois de calculada a Matéria Coletável, aplica-se a Taxa IRC. Em 2026, a taxa normal de IRC em Portugal é de 19%. No caso das PME e das Small Mid Cap, aplica-se 15% aos primeiros 50.000 € de matéria coletável.

Contudo, se o lucro tributável for superior a 1.500.000 €, acresce a derrama estadual, com taxas de 3% a 9%. Conforme prometido, abordamos este tema mais adiante.

4 - Municipal surcharge

The Municipal Surcharge is a tax levied on the taxable profits of companies located in a given municipality.

The municipal surcharge rate is set annually by the municipality and can vary between 0% and 1.5% of taxable income.

5 - Autonomous Taxation

Autonomous taxation is a tax payable on certain costs that the company may have, regardless of the net result for the period.

These costs include, for example:

• Expenses for light passenger vehicles;
• Representation expenses;
• E despesas não documentadas.

As taxas de tributação autónoma dependem do tipo de despesa: 10% nas despesas de representação e 50% nas despesas não documentadas, por exemplo. Nas viaturas, a taxa depende do custo de aquisição e do tipo de motor.

Explicamos as taxas todas no nosso guia da tributação autónoma.

6 - State Surtax

Para além da Derrama Municipal, algumas empresas podem estar sujeitas à famosa Derrama Estadual. Esta aplica-se quando o lucro tributável ultrapassa 1,5 milhões de euros. A taxa varia entre 3% e 9% por escalões e incide só sobre a parte do lucro tributável que excede cada limite.

Não confunda a Derrama Estadual com a Derrama Municipal!

Exemplo: quanto paga de IRC uma PME com 80.000 € de lucro?

Imagine uma PME com sede num município que cobra a derrama municipal máxima de 1,5%. Teve um lucro tributável de 80.000 € em 2026, sem prejuízos a deduzir nem benefícios fiscais. As contas ficam assim:

• IRC sobre os primeiros 50.000 €: 50.000 × 15% = 7.500 €;
  
  
• IRC sobre os restantes 30.000 €: 30.000 × 19% = 5.700 €;
  
  
• Derrama municipal: 80.000 × 1,5% = 1.200 €;
  
  
• E o total fica em 14.400 €, o que dá uma taxa efetiva de 18%.

A este valor somam-se as tributações autónomas que a empresa tenha. Depois descontam-se os pagamentos por conta e as retenções na fonte já feitas ao longo do ano.

And on the islands: is there a special tax regime?

In the context of corporate income tax in Portugal, it is important to address the situation of the islands, namely the Autonomous Regions of Madeira and the Azores. Due to their status as island territories and their economic and fiscal specificities, the islands have some particularities when it comes to CIT:

1. Região Autónoma da Madeira: a Região Autónoma da Madeira tem um regime fiscal específico conhecido como Centro Internacional de Negócios da Madeira (CINM). Este regime foi criado com o intuito de promover o desenvolvimento económico e atrair investimento para a região.
   
   O CINM oferece benefícios fiscais significativos para as empresas sediadas na Madeira, incluindo uma taxa reduzida de IRC de 5% sobre os lucros obtidos com atividades elegíveis. Esta taxa aplica-se às entidades licenciadas até 31 de dezembro de 2026 e vale até ao fim de 2033. Os restantes rendimentos estão sujeitos à taxa de IRC da Região, que em 2026 é de 13,3%. No caso das PME e das Small Mid Cap, aplica-se 10,5% aos primeiros 50.000 € de matéria coletável;
   
   
2. Região Autónoma dos Açores: no caso da Região Autónoma dos Açores, as taxas nacionais têm uma redução de 30%. Em 2026, isso dá uma taxa de IRC de 13,3% e, no caso das PME e das Small Mid Cap, 10,5% para os primeiros 50.000 € de matéria coletável.

It is important to note that tax regimes on the islands have specific requirements and are subject to conditions and limitations established by legislation. Companies interested in benefiting from these regimes must comply with the established criteria and obtain the appropriate authorizations and approvals from the competent bodies.

In addition to the specific tax regimes, companies on the islands are also subject to the same general tax rules and obligations that apply to income tax in mainland Portugal. This includes submitting the annual corporate income tax return (Modelo 22) and complying with the deadlines set for paying the tax.

IRC Payment Methods and Model 22

De acordo com o Código do IRC, o imposto sobre o rendimento é apurado e pago através da Modelo 22: uma declaração de rendimentos que as empresas devem submeter à Autoridade Tributária e Aduaneira no Portal das Finanças (não por email).

Below are some important details on how to pay IRC and how to fill in Modelo 22:

• Model 22Modelo 22 is the specific document for the annual corporate income tax return. In it, companies must include relevant information such as:
  
  
  • Income earned;
  • Costs and expenses;
  • Applicable tax benefits;
  • And other relevant financial information.
    
    
• Prazo de entrega: a entrega da Modelo 22 deve ser feita até ao último dia de maio do ano seguinte àquele a que os rendimentos se referem. Em 2026, para os rendimentos de 2025, o prazo foi prorrogado até 30 de junho. É fundamental respeitar o prazo para evitar coimas por atraso na entrega.

• Pagamentos por conta: além da declaração anual do Modelo 22, as empresas também devem efetuar pagamentos por conta ao longo do ano. Segundo o artigo 104.º do Código do IRC, são três prestações: em julho, em setembro e até 15 de dezembro do próprio ano. Calculam-se a partir do IRC liquidado no ano anterior: 80% desse valor se o volume de negócios for até 500.000 € e 95% se for superior. No fim, estes adiantamentos são abatidos ao IRC apurado na Modelo 22. O antigo pagamento especial por conta já não existe: foi revogado em 2022.

• Self-assessment: It is important to mention that the Portuguese tax system adopts the principle of self-assessment. This means that companies are responsible for correctly calculating the IRC due and making the appropriate payments. It is essential to keep accurate records, make correct calculations and comply with tax obligations related to IRC.

Delays and fines

It is essential that companies comply with the CIT payment deadlines set by the tax authorities in Portugal. Otherwise, they may be subject to penalties and fines. The amount of the fine depends on the length of the delay in payment and the company's financial situation.

No caso de atrasos no pagamento do imposto, a AT cobra juros de mora sobre o valor em dívida, a uma taxa fixada todos os anos (7,221% ao ano em 2026).

Se a liquidação do imposto se atrasar por culpa da empresa (por exemplo, por entregar a declaração fora de prazo), podem somar-se juros compensatórios de 4% ao ano, além das coimas.

The company's financial situation can also influence the imposition of fines. In cases where the company is facing proven financial difficulties, the tax authorities may grant a payment plan in installments, thus avoiding harsher fines.

Exemptions

In addition to the fees and fines related to Corporate Income Tax (IRC) in Portugal, it is important to note that some entities are exempt from paying this tax under the IRC code. These exemptions apply to specific organizations that carry out certain activities or have certain characteristics.

Public entities such as:

• the state;
• the municipalities;
• and other public administration bodies.

They are generally exempt from paying income tax. In theory, the CIT exemption for public entities aims to ensure that financial resources are directed towards fulfilling public obligations and services.

Além das instituições públicas, as instituições sociais também são elegíveis para isenção de IRC. Estas instituições desempenham um papel importante na proteção social e na assistência aos cidadãos, fornecendo serviços como:

• pensions;
• unemployment benefits;
• and social benefits.

Other entities that carry out activities of a cultural, recreational, sporting or scientific nature may also be eligible for IRC exemption.

These organizations play an important role in promoting culture, sport and scientific advancement, contributing to the enrichment of society as a whole. The CIT exemption for these entities is intended to encourage and support their activities, facilitating the allocation of financial resources for the development of these areas.

Requirements for Exemptions

Segundo o Código do IRC, as isenções de imposto sobre o rendimento estão sujeitas a certos requisitos que variam dependendo do tipo de isenção. As empresas que desejam beneficiar-se das isenções devem verificar se cumprem os requisitos estabelecidos pela legislação fiscal.

In addition to criteria related to the nature of the activities carried out by the company, there may be requirements related to the non-profit purpose of organizations seeking CIT exemptions. In some cases, it is necessary to demonstrate that the profits obtained by the organization are not distributed to the shareholders or owners, but are reinvested in the entity itself to fulfill its purpose.

How to Reduce IRC?

There are a number of legal ways to reduce your income tax payments. Some of the most common strategies include taking advantage of tax benefits offered by the government, such as deductions for investments in specific areas or for certain types of spending. It is also possible to reduce the tax burden by efficiently managing tax losses.

It is advisable to consult an accounting professional for more detailed advice on this matter. But for now, here are some simple tips:

Tax Benefits and the Reduction of Corporate Income Tax

Os benefícios fiscais são instrumentos que permitem a redução do imposto a pagar como contrapartida de investimento realizado (explicamos os principais no nosso artigo sobre benefícios fiscais ao investimento). Existem diferentes tipos de benefícios que podem ser aproveitados pelas empresas, como:

• Investment Support Tax Regime (RFAI);
• Incentivo à capitalização das empresas (ICE);
• Sistema de Incentivos Fiscais à Investigação e Desenvolvimento Empresarial (SIFIDE II), prorrogado até 2026;
• Tax benefits applicable to Inland Territories;
• E o Patent Box.

These benefits can translate into substantial gains in terms of competitiveness for companies, since:

1. They encourage innovation and accelerate investment;
2. They encourage research and development activities;
3. They promote the appreciation of Industrial Property and Copyright;
4. They encourage companies to increase their capital;
5. Incidem sobre o investimento produtivo e em inovação;
6. Podem ser usados por um período alargado;
7. And they are cumulative with financial incentives.

Remember that in order to gain access to tax benefits, certain requirements must be met:

• Have organized accounts;
• Not being considered a "company in difficulty";
• Be up to date with the Tax Authority and Social Security;
• Taxable profit is determined by direct methods.

Sanctions and Inspection Procedures

Within the scope of Corporate Income Tax (IRC), there are sanctions and inspection procedures aimed at ensuring that companies comply with their tax obligations.

It is important that companies are aware of these measures and understand the possible consequences of not complying with the rules and regulations relating to income tax. Below is some information you should know about the subject:

1. Tax Inspection: The Tax and Customs Authority (AT) has the power to carry out tax inspections to verify compliance with companies' tax obligations, including IRC. During an inspection, the AT can request documents, accounting records, information and carry out audits at the company's premises.
   
   
2. Consequences of infringementsIf irregularities or non-compliance with income tax are identified, the AT can apply sanctions and penalties. These penalties may vary depending on the seriousness of the infraction and may include:
   
   
   • Fines;
   • Interest on arrears;
   • Fines;
   • Additional tax assessments.
     
     
3. Rectification and voluntary payment: If a company identifies errors or omissions in its tax returns relating to IRC, it is possible to rectify them voluntarily. This rectification must be carried out before any inspection procedure or AT notification. Voluntary rectification can help avoid more severe penalties, provided it is carried out in an appropriate and transparent manner.
   
   
4. Challenge procedure: If a company disagrees with a tax decision made by the AT in relation to income tax, it is possible to resort to a challenge procedure. This process allows the company to formally challenge the decision and seek a review or annulment. The impugnation process follows a specific set of rules and deadlines established by tax legislation.

Corporate Income Tax in the European Economic Area and the European Union

A few comments on this matter, very briefly, so that we can finish.

Corporate Income Tax (IRC) is a tax applied not only in Portugal, but also in other countries in the European Economic Area (EEA) and the European Union (EU). These economic blocs influence tax rules and relations between member states in terms of corporate taxation.

Within the EEA, which includes all EU countries as well as Iceland, Liechtenstein and Norway, there are guidelines and agreements aimed at promoting tax harmonization and avoiding double taxation. These agreements aim to facilitate economic activity between member countries, providing a more favorable environment for companies to operate in different jurisdictions.

Discover other articles on our blog here.

An important example is the Mother-Daughter Directive: an EU directive that aims to eliminate double taxation of profits distributed between parent companies and daughter companies located in different member states. This directive establishes rules for the elimination or reduction of withholding tax on dividend payments between related companies.

In addition, there are other EU directives and regulations that indirectly affect corporate income tax and company taxation. For example, the Interest and Royalties Directive establishes rules for the elimination of withholding tax on interest and royalty payments between related companies in different Member States.

In the event of a country becoming a member state of the European Union: the accession of a member state to the EU implies the adoption of a series of rules and regulations, including the common tax rules, which directly affect corporate income tax and other tax issues. However, each member state retains a certain autonomy in defining its specific rates and rules within the limits set by the EU agreements.

Perguntas frequentes sobre o IRC

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