Geopolitical situation more of a worry to Portuguese companies than the tax burden

The latest survey from the Deloitte Tax Observatory reveals that Portugal’s companies are more worried about the geopolitical situation and the effects of US tariffs than Portugal’s tax burden as the government announced it would slash IRC to 17% in 2028.

These were among the main conclusions of the 2025 survey from Deloitte’s Tax Competitiveness Observatory that was published on September 22.

According to Observatory which is based on a companies survey carried out between April and May, geopolitical uncertainty headed the list of concerns with 4.43 from a scale of 1-5, five being the most concerned, ahead of tax burden concerns at 4.32 points.

Last year it was the tax burden that most worried Portuguese companies with geopolitical worries not even a thing.

Instead, last year companies were more worried about social and political worries after the then AD government fell over a vote of confidence in its leader, Prime Minister, Luís Montenegro and concerns as to if the State Budget for 2024 would pass or not.

And this year issues such as supply chain problems, inflation, interest rates and unemployment have fallen way down the list of worries.

The majority of companies continue to see tax policy as a driver for competitiveness, even if there has been a slight fall since 2024 when it stood at 95%.

Companies also want a simplification of bureaucracy and policies that attract and maintain investment (4.6 points) with this followed by the efficient working of the tax courts, tax incentives for investment and labour legislation.

I’m fact effective justice was flagged as the greatest obstacle to investment in Portugal, followed by the effectiveness of the actual tax system itself – despite there having been improvements on some fronts, 93% of companies still think Portugal’s tax system is too complicated and 62% believe it to be ineffective.