How corporate tax works in Portugal
Portugal taxes resident companies on worldwide income. The 2026 mainland corporate income tax rate is 19%, while Madeira and the Azores have lower standard rates.
SMEs and small-mid-cap companies can use a 15% rate on the first EUR 50,000 of taxable income in mainland Portugal. Larger companies can also face municipal surtax and state surtax, so the effective rate can move well above the headline number.
{ "Pillar Two is in force for large groups": "Portugal has implemented the global minimum tax regime for groups with consolidated revenue of at least EUR 750 million, so multinational planning needs a second layer beyond the domestic CIT rate." }
Tax rates at a glance
- Standard corporate tax
- 19%Mainland 2026
- SME rate
- 15%
- Municipal surtax
- Up to 1.5%
- State surtax
- 3% - 9%
- Madeira / Azores
- 13.3%
Who benefits most
These profiles tend to benefit most when the rules match their real residence, payroll and business setup.
FoundersHolding companiesSMEsRegional operatorsMultinational groups
Watch out for
- The mainland corporate rate is set to fall from 19% in 2026 to 18% in 2027 and 17% in 2028, subject to the enacted schedule.
- Municipal surtax varies by municipality, so the effective tax rate can differ across Portugal even before state surtax.
- { "The annual return stack still matters": "corporate tax return, accounting records, VAT and payroll filings all add compliance cost." }
- Large groups need to check the global minimum tax regime, not just the domestic CIT rate.
Frequently asked questions
What is the corporate tax rate in Portugal for 2026?
The mainland standard rate is 19% in 2026. Madeira and the Azores have lower standard rates, and SMEs can use a reduced 15% rate on the first EUR 50,000.
Does Portugal have corporate surtaxes?
Yes. Municipal surtax can apply at up to 1.5%, and state surtax applies at 3%, 5% and 9% on higher profit bands.
Is Portugal good for holding companies?
It can be, but only after checking participation exemption, withholding tax, substance, VAT and Pillar Two exposure. The headline rate alone is not the whole answer.