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flag Portugal Portugal: Business Environment

In this page: Accounting Rules | Tax Rates | Intellectual Property | Legal Framework | Standards | Business Practices

 

Accounting Rules

Tax Year
From 1 January to 31 December.
Accounting Standards
The official accounting plan (Plano Oficial de Contabilidade - POC) and accounting standards CNC) DC 1 to DC 29.
Accounting Regulation Bodies
Ministry of Finance
CNC
Accounting Reports
Company financial statements must include a balance sheet (simple or detailed presentation), a profit and loss account (drawn up as a table), notes to the accounts and an annual report (called D.O.G. « Documento de Orgão de Gestão»).
Publication Requirements
There are three types of company which must legally publish their financial statements: public companies, limited liability companies and companies listed on the stock exchange (according to European norms). Company financial statements are published once a year.
Professional Accountancy Bodies
CTOC , Chamber of Chartered Accountants
APOTEC , Accountants' Association
APPC , Accountants' Association
OROC , Order of Auditors
Certification and Auditing
Companies have to seek a statutory auditor to conduct an annual audit of the financial health of their organization. You can contact an external auditor: Mazars ; Ernst&Young ; KPMG ; PwC ; D.F.K e ; Associados ; Moore Stephens
Accounting News
RTP Accounting News

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Tax Rates

Consumption Taxes

Nature of the Tax
Imposto Sobre o Valor Acrescentado (I.V.A.) = Value Added Tax (VAT).
Tax Rate
23%
Reduced Tax Rate
Reduced VAT rates vary between 6% and 13%. They are 13% for catering, petrol and some foodstuffs. The 6% rate applies to most foodstuffs, water, publications, electricity, transport, hotels and leisure.
Other Consumption Taxes
 A vehicle tax named IUC also apply in Portugal

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Corporate Taxes

Company Tax
21%
Tax Rate For Foreign Companies
Foreign companies are taxed on the profits they make in Portugal. For further information access the web portal of the Finance Ministry (in Portuguese).
Capital Gains Taxation
Long term capital gains are taxed in Portugal at the standard Corporate Tax rate. Some exemptions apply on some type of capital.
Main Allowable Deductions and Tax Credits
To determine fiscal results you can deduct: depreciation, interest, remuneration of directors (totally deductible), and royalties. The fiscal loss of a given year may be carried forward over one or several of the six following accounting years. On the other hand, the carry-back method is not authorized.
Expenses are deductible for depreciation or amortization, reserves, rents for premises and equipment, wages, etc.
Tax credit exists especially for apprenticeships. For more information.
Other Corporate Taxes
Stamp duty is levied on many types of transactions. Real Estate transfer tax apply at rates from 5 to 10%, depending on type of assets and area concerned.
Other Domestic Resources
Consult Doing Business Website, to obtain a summary of the taxes and mandatory contributions.
 

Country Comparison For Corporate Taxation

  Portugal OECD United States Germany
Number of Payments of Taxes per Year 8.0 12.0 11.0 9.0
Time Taken For Administrative Formalities (Hours) 275.0 176.0 175.0 207.0
Total Share of Taxes (% of Profit) 42.6 42.7 46.7 46.8

Source: Doing Business - Last Available Data.

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Individual Taxes

Tax Rate

Personal income tax (IRS) Porgressive rate from 14.5% to 48%
Up to EUR 7,000 14.5%
EUR 7,000 - 20,000 28.5%
EUR 20,000 - 40,000 37%
EUR 40,000 - 80,000 45%
Over EUR 80.000 48%
Additional Solidarity Surcharge An additional 2,5% solidarity surcharge will be levied on taxable income between EUR 80,000 and EUR 250,000 and 5% on the taxable income exceeding EUR 250,000. Moreover a surcharge of 3.5% applies to income in excess of the annual minimum wage (EUR 6,790).
Allowable Deductions and Tax Credits
Children's education and prolonged studies for adults (courses approved by the Ministry), health expenses, investment in renewable energies, buying IT equipment, etc.
Special Expatriate Tax Regime
If expatriates do not have a residence in Portugal, they can choose between total income tax in Portugal or in their country of origin. If they do have a residence in Portugal, they are subject to the IRS regime.

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Double Taxation Treaties

Countries With Whom a Double Taxation Treaty Have Been Signed
Portugal has signed agreements with 52 countries
Withholding Taxes
Dividends: 25%, Interest: 25%, Royalties: 25%.

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Sources of Fiscal Information

Tax Authorities
Directorate General of taxes in Portugal
Other Domestic Resources
The "lojas do cidadão" (citizen shops) to help you with tax issues, social security, water, gas and electricity contracts, etc..

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Intellectual Property

National Organizations
The National Institute for Industrial Property, the organization for the protection of intellectual property.
The Portuguese Authors' Society for copyright
List of the institutions which manage copyright.
Regional Organizations
For the protection of patents: the European Patent Office.
International Membership
Signatory to the Paris Convention For the Protection of Intellectual Property
Membership to the TRIPS agreement - Trade-Related Aspects of Intellectual Property Rights (TRIPS)
 

National Regulation and International Agreements

 
Type of property and law Validity International Agreements Signed
Patent
 
Industrial property Code, Decree- Act n° 16/95
24 January 1995
20 years
Patent Cooperation Treaty (PCT)
Trademark
 
Industrial property Code, Decree- Act n° 16/95
24 January 1995
10 years Trademark Law Treaty
Protocol Relating to the Madrid Agreement Concerning the International Registration of Marks
Design
 
Industrial property Code, Decree- Act n° 16/95
24 January 1995
25 years  
Copyright
 
"Código Direitos de autor" (Copyright Code)
70 years after the death of its author, or after the most recent death of its authors. Berne convention For the Protection of Literary and Artistic Works
Convention for the Protection of Producers of Phonograms Against Unauthorized Duplication of Their Phonograms
Rome ConventionFor the Protection of Performers, Producers of Phonograms and Broadcasting Organizations
WIPO Copyright Treaty
WIPO Performances and Phonograms Treaty

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Legal Framework

Independence of Justice
Yes
Equal Treatment of Nationals and Foreigners
Yes
The Language of Justice
Portuguese and Mirandese in a region of the north-east of the country.
Recourse to an Interpreter
Possible.
Sources of the Law and Legal Similarities
Portuguese law has various sources: the Constitution, laws passed by Parliament, ministerial decrees and orders, international conventions and treaties ratified by Portugal.
Because Portugal belongs to the European Union, national law conforms to the requirements of Community legislation.
There are legal similarities with all the countries whose law has come from Roman law, in particular with French law which inspired the Portuguese model.
Checking National Laws Online
Diário Republica (Official Gazette)

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Standards

National Standards Organizations
Portuguese certification association (APCER)
Portuguese quality institute (IPQ)
Integration in the International Standards Network
At the European level:CEN - CEN, European Committee for Standardization
- CENELEC, European Committee for Electrotechnical Standardization

- ETSI European Telecommunications Standards Institute

At the international level:
- International Standard organization (ISO)
- International Electrotechnical Commission (IEC)

Classification of Standards
NP, the national certfication mark
CE, European certification mark. It is compulsory for a product to be sold on the market.
Online Consultation of Standards
APCER, certification association
Certification Organizations
Portuguese accreditation institute (IPAC)

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Business Practices

General Information
Executive planet
Opening Hours and Days
Businesses are closed on Saturday afternoon and Sundays and closed between noon and 3pm for lunch.
Banks close at 3pm, while shops close at 7 o'clock in the evening. Hypermarkets close at midnight from Monday to Saturday, and also on Sunday in November and December.
 

Public Holidays

New Year's Day 1 January
Shrove Tuesday (the day before Ash Wednesday, the first day of Lent) (not compulsory, but followed by everybody, all companies and public and private organizations) March/April
Good Friday (the Friday before Easter) March/April
Freedom Day 25 April
Labor Day 1 May
National Day 10 June
Corpus Christi June
Saint Anthony (in Lisbon and some other smaller cities) 13 June
Saint John (in Porto, Braga and some other smaller cities) 24 June
Assumption 15 August
Birth of the Republic 5 October
All Saints 1 November
Independence Day 1 December
Immaculate Conception 8 December
Christmas 25 December, but 24 December, which is not a public holiday, is considered to be one too, by decision of the Council of Ministers every year.
 
Holiday Compensation
Consult the Portugal Employment Reform.
 

Periods When Companies Usually Close

There are not many periods when companies close in Portugal. The Administration and companies are always open, with most staff and management present.
 

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Last Updates: January 2015