Portugal

Corporate - Significant developments

Last reviewed - 09 July 2025

December 2025

2026 State Budget Law published

Law 73-A/2025, dated 30 December, published in the Official Gazette, approves the 2026 State Budget Law. This Law enters into force on 1 January 2026. PwC Portugal's analysis will be shared in due time.

Autonomous Region of the Azores – Budget for 2026

The Regional Legislative Decree No. 27/2025/A, of 30 December, has been published, approving the Budget of the Autonomous Region of the Azores for the year 2026. The decree now published takes effect on 1 January 2026. For more details, read the PwC Portugal Tax Flash.

Autonomous Region of Madeira – Budget for 2026 approved

The Budget of the Autonomous Region of Madeira for 2026 was approved by Regional Legislative Decree No. 8/2025/M, of 30 December.The amendments introduced shall take effect from 1 January 2026. For more details, read the PwC Portugal Tax Flash.

Pillar Two (RIMG) - Extension of the deadline for submission of Registration Form 62

Order No. 158/2025-XXV, of 12 December, issued by the Secretary of State of Tax Affairs, extends the deadline for the submission of Registration Form 62, approved by Ordinance No. 290/2025/1, of 2 September, under the Portuguese Pillar Two Regime (“Regime do Imposto Mínimo Global” or “RIMG”). For more details, read the PwC Portugal Tax Flash.

VAT - Tax Authority’s interpretation of VAT deductibility for Electric and Plug‑In Hybrid Vehicles

Circular Letter No. 25088, dated 21 November 2025, was published with the Tax Authority’s interpretation regarding the deductibility of VAT on electric and plug-in hybrid vehicles, particularly when those vehicles are used for personal purposes. For more details, read the PwC Portugal Tax Flash.

November 2025

Reduction of corporate income tax (CIT) rate enacted

Law 64/2025, of 7 November 2025, published in the Official Gazette, amends the CIT Code, reducing the general CIT rate to 19% for tax periods beginning on or after 1 January 2026, 18% for tax periods beginning on or after 1 January 2027, and 17% for tax periods beginning on or after 1 January 2028.

For more details, read the PwC Portugal Tax Flash.

Amendment to tax benefits

Law 65/2025, of 7 November 2025, published in the Official Gazette, repealed paragraph 2 of Article 19-B of the Tax Benefits Code, concerning the tax incentive for increased wages, that excluded from the scheme taxpayers that increased the wage spread among employees compared to the previous year. This amendment applies to tax years starting on or after 1 January 2025.

For more details, see the Tax credits and incentives section.

October 2025

Value-added tax (VAT) groups

Law 62/2025, of 27 October 2025, published in the Official Gazette, introduces the VAT group regime in Portugal by a mechanism that consolidates the VAT balances payable or recoverable by members of a group of entities. Entry into force is scheduled for 1 July 2026.

For more details, read the PwC Portugal Tax Flash.

2026 State Budget law proposal and standalone tax policy measures

The 2026 State Budget Law proposal was delivered by the government on 9 October 2025. Highlights of the main tax measures being proposed include:

Vehicle taxes: Intermediate vehicle tax (ISV) rate (25%) for compliant plug‑in hybrids; additional to circulation tax (IUC), which remains in force.
Excise taxes: Extended reduced tax on alcohol and alcoholic beverages for certain traditional spirits.
Real estate transfer tax (IMT): 2% update of housing IMT brackets.
Tax benefits: Several tax benefits extended through 31 December 2026 (e.g. forestry, cultural/recreational entities, certain financial operations, VAT gratuitous supplies).
Sector levies: Banking contribution remains in force; solidarity surcharge on banking repealed; energy levy (CESE) continue, with narrowed CESE base (excludes certain gas/electric assets from 2026).
Compliance and reporting: PDF invoices accepted through 31 December 2026; Standard Audit File for Tax Purposes (PT) accounting file submission starts for 2027 periods (delivered in 2028).

Alongside the 2026 State Budget law proposal, a number of standalone legislative initiatives are under consideration, namely:

CIT: Standard rate reduced to 19% for 2026, with planned cuts to 18% (2027), and 17% (2028); SMEs/Small Mid Caps at 15% on first 50,000 euros (EUR).
Draft VAT group regime from 1 July 2026 (optional, three‑year minimum, parent‑level consolidation).
Real estate transfer tax (IMT) / Additional real estate tax (AIMI), under the so-called housing agenda: Higher IMT for non‑resident purchasers (excluding emigrants) and AIMI exemption for leases up to EUR 2,300 under consideration.
Tax justice/procedure:

Compensatory interest tied to non‑taxpayer error.
20‑year absolute limitation on tax debts; broader ex officio review (four years, any illegality).
Harmonised claim deadlines (four months).
Electronic notifications deemed served on day five.
Mutual Agreement Procedure (MAP) codified with taxpayer interest for late implementation.;
Review of tax arbitration awards on civil‑procedure grounds.

For more details, read PwC Portugal's newsletter 'A tax-free Budget Law?'.

September 2025

Hong Kong, Liechtenstein, and Uruguay excluded from the Portuguese list of countries, territories, and regions with a more favourable tax regime

Order 292/2025/1, dated 5 September 2025, published in the Official Gazette, excluded Hong Kong, Liechtenstein, and Uruguay from the list of countries, territories, and regions with a more favourable tax regime. This follows the requests submitted respectively by the region and countries, as they were excluded from the European Union’s (EU's) list on non-cooperative jurisdictions as of 18 February 2025.

The full Portuguese list of countries, territories, and regions with a more favourable tax regime is available in the Other issues section.

Pillar Two: Portugal releases official Registration Form 62

Order 290/2025/1, of 2 September 2025, published in the Official Gazette, approves Registration Form 62 and the respective instructions, for the purposes of the Portuguese Pillar Two Regime (Regime do Imposto Mínimo Global or RIMG), approved by Law no. 41/2024, of 8 November 2024.

This form is intended for the fulfilment of the obligation to register constituent entities located in Portugal by enterprise groups subject to the aforementioned regime, as well as to notify the commencement of the regime’s application to large-scale domestic groups and multinational enterprise groups in the initial phase of international activity.

For more details on the new measures, read the PwC Portugal Tax Flash.

July 2025

Autonomous Region of Madeira: Budget for 2025 approved

The Budget of the Autonomous Region of Madeira for 2025 was approved by Regional Legislative Decree no. 2/2025/M, of 2 July 2025.

The amendments introduced shall take effect from 1 January 2025.

For more details on the new measures, read the PwC Portugal Tax Flash.

March 2025

Tax simplification measures: Legislative changes

Decree-Law 49/2025, dated 27 March 2025, approves tax simplification measures, specifically amending the VAT Code, the Tax Benefits Code, the Code of Tax Procedure and Process, and other legislative acts.

The changes introduced will come into effect on 1 July 2025.

For more details on the new measures, read the PwC Portugal Tax Flash.