Corporate Income Tax (IRC) for a New Company in Portugal
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A company with its seat or effective management in Portugal pays corporate income tax, called IRC, on its profit. For tax periods starting in 2026 the general rate in the Código do IRC (CIRC) is 19 percent, and small and medium companies pay 15 percent on the first 50,000 euros of taxable profit.
We read the consolidated CIRC on Diário da República on October 19, 2026. The rates below come from article 87 as rewritten by Lei 64/2025 of November 7, 2025, in force from November 12, 2025, and that date is the article’s update date. Another law, Lei 73-A/2025 of December 30, 2025 (the 2026 state budget), is also in the list of changes to the code; this article does not rely on it.
Who pays IRC in Portugal?
Article 2 of the CIRC lists the taxable persons. They include commercial companies, cooperatives and other legal entities with their seat or effective management in Portuguese territory. Entities with neither, whose income earned in Portugal is not subject to personal income tax, are also taxable persons.
For a company with its seat or effective management in Portugal, the code taxes the profit of the commercial, industrial or agricultural activity. Nothing on the page depends on whether the partners are American, British or Portuguese. The company itself is created through the steps in setting up a company in Portugal, and every individual partner needs a Portuguese NIF.
What IRC rate does a new company pay?
| Tax period starting | General rate (article 87, paragraph 1) |
|---|---|
| During 2026 | 19% |
| During 2027 | 18% |
| On or after January 1, 2028 | 17% |
Paragraph 2 of article 87 gives a reduced rate. A company that carries out an agricultural, commercial or industrial activity as its main activity and qualifies as a small or medium company, or as a “Small Mid Cap” company under the annex to Decreto-Lei 372/2007, pays 15 percent on the first 50,000 euros of taxable profit. The general rate applies to the rest. The code says this reduced rate applies to tax periods starting on or after January 1, 2026, and that it is subject to the European rules on de minimis aid.
Paragraph 8 sets 12.5 percent instead of the reduced rate for a company qualified as a startup under Lei 21/2023, when it meets the conditions in the law. This article does not check the startup conditions, which you should read in that law.
Is there a surcharge on higher profits?
Article 87-A, the “derrama estadual” or state surcharge, adds rates only to the part of taxable profit above 1,500,000 euros. A new small company will usually be under that line. A municipal surcharge exists under other legislation, which we did not read for this article, so we do not state its rate.
When is the IRC return due?
Article 120 says the periodic income return is sent each year by electronic transmission, by the last day of May, whether or not that day is a working day. A company that adopts a tax period different from the calendar year files by the last day of the fifth month after the period ends. A company that ceases activity files by the last day of the third month after the cessation date.
The Portal das Finanças page for the form itself was not read for this article.
How do payments on account work?
Article 104 says companies with a commercial, industrial or agricultural main activity pay the tax in three payments on account, due in July, September and December 15 of the year the profit relates to. The balance, the difference between the total tax on the return and what was paid on account, is due by the last day of the return deadline. Taxpayers are excused from payments on account when the tax of the reference period used to calculate them is under 200 euros.
The code also sets a separate payment mechanism for the state surcharge. The page text we read does not give a special rule for the first tax period of a new company, so check that with the tax office or an accountant. For help choosing one, see the article on a certified accountant and what the tax authority expects and note the company’s VAT side in VAT for freelancers and small businesses.
What about taxes in the United States or the United Kingdom?
The company’s IRC is only the Portuguese side. A US citizen owner also has a US side, covered in taxes for Americans abroad. This article states nothing about US or UK tax, because no IRS or HMRC page was read for it.
Where does IRC fit in the wider picture?
If you work on your own account instead of through a company, read about the independent worker regime. Founders applying for residence can see the D2 entrepreneur visa, and the wider picture is in working in Portugal as an American or a Briton.
More guides in this series: Social Security contributions.
This article is general information, not tax advice. Read on October 19, 2026: the consolidated Código do IRC on Diário da República (articles 2, 87, 87-A, 104 and 120, with the notes on Lei 64/2025).
FAQ
Is a company in Portugal taxed separately from its owner?
Yes. Article 2 of the CIRC makes commercial companies with their seat or effective management in Portugal taxable persons for IRC, so the company is the taxpayer on its own profit. The code says nothing about the partners' own tax, which is a different tax.
Where do I file the company's IRC return?
Article 120 of the CIRC says the periodic income return is sent electronically. The Portal das Finanças page for the Modelo 22 was not read for this article, so the form's name and screen are not described here.
What is the IRC rate for a company created now?
The consolidated CIRC sets 19 percent for periods starting during 2026, 18 percent for periods starting during 2027, and 17 percent for periods starting on or after January 1, 2028.
Do payments on account apply in the first year?
Article 104 sets three payments on account in July, September and December 15 of the year the profit relates to, and says taxpayers are excused when the tax of the reference period is under 200 euros. The page text read does not give a separate rule for a first period, so ask the tax office or an accountant about it.
Sources
Official pages this article was checked against, with the date we last read them.
About the author
See author pageAurelio Maurici is the co-founder of EasyFranceNow and EasyPortugalNow and the author behind the tax guidance for U.S. and UK nationals in Europe.
He holds a Master's degree in Business Law from Aix-Marseille Université, where his work centered on legal structures, institutional systems and administrative frameworks. Based in Aix-en-Provence, he has spent years working inside the European legal and administrative system on behalf of international clients, handling real files every week: bank account openings and the FATCA-driven restrictions Americans run into, public healthcare onboarding, tax residency and cross-border reporting questions, and the documentary standards institutions apply in practice rather than in theory.
That hands-on work is the foundation of the guides on this site. His guidance is built from primary sources, the official pages of the countries concerned and the IRS, and updated when procedures change. He writes the tax guides on this site.
His work is procedural and operational, not a substitute for regulated advice. When a situation calls for a licensed tax or legal professional, he says so plainly and helps coordinate the right one.
