What tax changes are expected in 2026?
Portugal’s State Budget for 2026 will introduce a number of changes in taxes approved by parliament and coming into force from January, 2026.
First off, IRC tax has fallen by 1% to 19%. It had already fallen by 1% in 2025 from 21% to 20%.
In the case of SMEs, (Small Mid Caps) tax will be applicable on the first €50,000 at 15%.
Loss-making companies
Companies that post losses will once again escape a penalty of ten percentage points in autonomous IRC taxation for another year, according to a proposal to amend PSD and CDS to OE2026 approved in the specialty.
This rule of the IRC code has been temporarily suspended by several State Budget laws since the pandemic, but this year the Government decided not to include it in its proposal.
This concerns an additional tax that applies to certain expenses or charges of companies, the most relevant being those that cover vehicles used by companies.
And there is no way to escape them from the outset, even in cases where the company, due to a loss, has no IRC to pay.
The code determines that autonomous tax rates have risen to 10% for companies posting a tax loss if they are in the first or second year of activity.
IRC in the Madeira Tax Reduced Zone
IRC tax benefits targeted at companies with a licence to operate in the Madeira Offshore Zone (ZFM) has been extended for five years to December 31, 2033.
If the alteration had not been approved, the regime would have ended in 2028.
Therefore, and in accordance with the proposal now approved, ”the income of entities licensed to operate in the Madeira Free Trade Zone from January 1, 2015 and until December 31, 2026 is taxed under IRC, until December 31, 2033, at the rate of 5%”.
In addition, ”the partners or shareholders of companies licensed to operate in the Madeira Free Trade Zone, who benefit from this regime, are exempt from IRS or IRC until December 31, 2033″, as is currently the case, on the profits made available to them by these companies, with the exception of those resulting from operations carried out with entities resident or domiciled in tax havens.
SAF-T accounting declaration postponed
The mandatory delivery of the Standard Audit File for Tax (SAF-T) – the electronic reporting format designed to standardise the exchange of accounting and tax data between businesses and tax authorities – has been postponed for another year.
SAF-T Portugal is a key component of the country’s digital tax system, ensuring financial transparency and improving audit efficiency and contains all the accounting and tax information pertaining to a company.
“The presentation of the SAF-T (PT) file relating to accounting, under the terms defined by Ordinance No. 31/2019, of January 24, is applicable to periods from 2027, to be delivered in 2028 or in subsequent periods,” reads the State Balance Sheet. Currently, it was expected that this obligation would begin to be implemented for the periods starting in 2026, with delivery in 2027.
Creation of Groups VAT
From January, a Groups VAT came into force so that economic groups can consolidate tax payables or tax recoverable from the State.
This means that there is a consolidation of the balances of VAT payable or recoverable by the members of a group of entities, united by financial, economic and organisational ties.
End of Indirect SIFIDE
The government has advanced with changes to SIFIDE, a tax benefit for company research and development.
The direct SIFIDE continues on, but the the indirect (through funds) has been terminated. Even so, the government has increased the term of use of stock that exists in the funds from three to five years, but no new entries are allowed from January 1, 2026.
