An expense can go through your Portuguese company when it is incurred to obtain or secure the business's income and is documented with an invoice bearing the company's NIF (article 23 of the Corporate Tax Code). Rent, salaries, professional fees, software, marketing, business travel and equipment are deductible; fines, personal spending and undocumented costs are not. And there is a trap almost nobody mentions: several deductible expenses attract autonomous taxation — 10% on entertainment expenses and 8% to 32% on company-car costs.
The golden rule: article 23 of the CIRC
Portuguese law has no closed list of accepted expenses. It has a principle: costs are deductible when incurred to obtain or secure income subject to corporate tax. In practice, every expense faces three tests:
- Business purpose — it serves the company's activity, not the owner's personal life;
- Documentation — an invoice issued with the company's NIF; a till receipt without the NIF or a personal receipt does not qualify;
- Booking — recorded in the correct period.
Missing paperwork is the costliest mistake: besides losing the deduction, undocumented expenses pay 50% autonomous tax.
What is clearly deductible
| Category | Examples | Notes |
|---|---|---|
| Premises | Office/shop rent, utilities, cleaning, insurance | Contract and invoices with the company NIF |
| Staff | Salaries, social security, workplace insurance, meal allowance, training | See the meal allowance rules |
| External services | Accountant, lawyer, consultants, software subscriptions, hosting | 100% deductible |
| Communications | Mobile, internet, landline | Contracts in the company's name |
| Marketing | Advertising, website, trade fairs, samples | 100% deductible |
| Business travel | Trips, hotels, tolls, parking | With a demonstrable business purpose |
| Equipment | Computers, furniture, tools | Larger items depreciate over several years |
| Financial | Loan interest, bank fees | Interest-limitation rules apply at high leverage |
What is never deductible
- Fines and penalties (parking, traffic, tax);
- Corporate tax itself and autonomous taxes;
- The owner's personal spending — family groceries, holidays, everyday clothing;
- Costs without a valid document — which also pay 50% autonomous tax;
- Confidential expenses or fake documentation — inspection and sanctions territory.
The grey areas (what clients ask us every week)
Can I expense lunches?
Meals with clients, suppliers or partners are entertainment expenses: deductible, but subject to 10% autonomous tax. Your everyday lunch is not a company cost — that is what the meal allowance is for. On business trips, meals fall under travel/per-diem rules.
What about the car?
A company passenger car is deductible (depreciation, fuel, insurance, maintenance, lease payments) — but all those costs attract autonomous tax by purchase-price band (table below). Fully electric vehicles get the most favourable regime. Run the numbers before buying.
Phone and home internet?
A company-contract mobile with business use is deductible. The owner's home internet is a grey zone in a company — only with clear separation, case by case.
Home office?
A company can formally rent a room from the owner (lease contract, market rent) — but that rent becomes the owner's personal rental income. Putting "half the house electricity" through the company without a contract invites corrections on inspection.
Clothes? Gym?
Everyday clothing is not deductible (uniforms and safety equipment are). Health and wellness only qualify as social-utility benefits when granted to all employees — not to the owner-director alone.
Travel?
Trips with a demonstrable business purpose (meeting, trade fair, site visit, training) are deductible — keep proof of the purpose, not just the hotel invoice. A holiday with one meeting in the middle does not survive an inspection.
The trap: autonomous taxation in 2026
Expensing is rarely free. Several deductible costs pay their own tax, even when the company makes a loss — and rates rise 10 points in loss-making years:
| Expense | 2026 rate |
|---|---|
| Entertainment expenses (client meals, receptions, events) | 10% |
| Per diems and own-car mileage not recharged to clients | 5% |
| Combustion car — cost up to €37,500 | 8% |
| Combustion car — €37,500 to €45,000 | 25% |
| Combustion car — above €45,000 | 32% |
| Eligible plug-in hybrid / CNG (same bands) | 2.5% / 7.5% / 15% |
| Undocumented expenses | 50% |
The right question is not "can I?" — it is "what does it cost?"
A €100 deductible expense saves up to €20-21 of corporate tax, but may pay €10 of autonomous tax — and disguised personal spending costs corrections, interest and fines on inspection, plus possible taxation as the owner's income. An accountant's job is not to say yes to everything: it is to optimise the net tax cost of each decision within the law. That is what we do for 200+ companies in HVR's accounting plans — request a free consultation, in English.
Frequently asked questions
What expenses can go through a Portuguese company?
Those incurred to obtain or secure the business's income, documented with an invoice bearing the company's NIF: rent, salaries, professional fees, software, communications, marketing, business travel, equipment and external services, among others (article 23 CIRC).
Can I deduct client lunches and dinners?
Yes — as entertainment expenses, subject to 10% autonomous tax. Your everyday meals are not a company cost; the meal allowance exists for that.
What happens if I put personal expenses through the company?
On inspection, the tax authority disallows the cost (more corporate tax, interest and fines) and may treat the amount as the owner's income, with personal tax and contributions. Undocumented expenses also pay 50% autonomous tax.
Do I always need an invoice with the company NIF?
Yes — it is the single most important practical rule. Receipts without the NIF or card statements do not support a deduction.
Is buying a car through the company worth it?
It depends on price and powertrain: costs attract 8% to 32% autonomous tax for combustion cars, 2.5% to 15% for eligible plug-in hybrids, with fully electric vehicles treated most favourably. Simulate before buying.
Is autonomous tax due even in a loss-making year?
Yes — and the rates increase by 10 percentage points when the company reports a tax loss.