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Corporate tax
| Tax rate for resident companies |
The rate of the company tax (IRC) is 25%. A municipal surcharge (Derrama) can be also perceived and varies between 0% and 10% according to city halls. Lisbon applies the highest Derrama rate of 10%, therefore the IRC global rate in Lisbon is 27.5%.
There are reduced IRC rates: a 20% rate applies for instance to non commercial, industrial or agricultural activity-oriented companies.
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| Tax rate on long-term capital gains |
In Portugal, capital gains are taxed at the rate of 25% + Derrama rate (0-10%).
These following elements are deductible to find out the fiscal result:
- Depreciations
- Interests
- The payment of the executives is entirely deductible,
- Royalties
The fiscal loss of a year can be put postponed on one or some of the 6 following accounting years. Moreover, the carry-back method is not authorized.
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| System governing groups of companies and dividends paid by subsidiaries to their parent companies |
Dividends paid to non-resident companies:
Payment at source 25% full of discharge (unlisted companies) or 12.5% (recently privatized companies).
Infringements by international agreements.
Dividends paid to residents companies:
Payment at source 15% or 7.5% for 5 years for recently privatized companies.
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| Tax rate on branches |
Branches are taxed in Portugal with the corporate tax and a municipal tax as any company registered in Portugal.
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Income tax
| Fiscal year |
The fiscal year begins on January 1st and ends on December 31st of the same year.
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| Income tax rate |
Tax Schedule 2005 for a single person:
| In euros | Rate | | 0 - 4.266 | 12% | | 4.266 - 6.452 | 14% | | 6.452 - 15.997 | 24% | | 15.997 - 36.792 | 34% | | 36.792 - 53.322 | 38% | | > 53.322 | 40% |
The married taxpayers is the object of a common levy. No wealth tax.
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VAT rates
| Standard rates |
21%
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| Reduced rates |
The reduced rates From VAT vary between 5% and 12%: 12% for catering, petrol and some foodstuffs. The rate From 5% applies to most From food products, water, publications, electricity, transport, hotel business and leisure activities.
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