Corporate Tax (IRC) in Portugal 2026: SME Rate, Payments on Account

By Hugo Ribeiro, Certified Accountant · Member of the Order of Certified Accountants · HVR Business Consulting

Corporate Tax in Portugal 2026: SME Rate, Payments on Account and Tax Incentives

By Hugo Ribeiro, Chartered Accountant (Contabilista Certificado, OCC) · HVR Business Consulting · April 2026

The corporate income tax (IRC) rate for SMEs in Portugal in 2026 is 15% on the first EUR 50,000 of taxable profit (art. 87(2) of the Corporate Income Tax Code, CIRC, as enacted by Law 64/2025 of 7 November), and 19% on profit above that figure. The general IRC rate for companies that are not SMEs is 19% (art. 87(1) CIRC and art. 3(2) of Law 64/2025).

Portuguese corporate tax rates 2026 — table

Type of company	Taxable profit	IRC rate
SME — first EUR 50,000	Up to EUR 50,000	15%
SME — excess	Above EUR 50,000	19%
Large company (not an SME)	Any amount	19%
Company in Madeira (CINM free zone)	—	5%
Start-up (1st and 2nd financial year, SME)	Up to EUR 50,000	12.5%

Who counts as an SME for corporate tax purposes in 2026

To qualify for the reduced 15% rate (art. 87(2) CIRC), a company must meet at least two of the following criteria (Decree-Law 372/2007 and EU Recommendation 2003/361/EC):

Balance sheet total: below EUR 4 million
Turnover: below EUR 8 million
Headcount: fewer than 50 employees

Corporate tax payments on account in 2026

Payment	Deadline	Amount
1st payment on account	July	25% of the previous year’s IRC
2nd payment on account	September	25% of the previous year’s IRC
3rd payment on account	December	25% of the previous year’s IRC

Exemption from the 1st payment on account: SMEs with turnover of up to EUR 500,000 in the previous financial year are exempt from the first payment on account (July).

Autonomous taxation under IRC in 2026

Autonomous taxation is a charge on certain expenses rather than on profit, which means it is payable even in a loss-making year.

Expense	Autonomous taxation rate
Passenger cars (acquisition cost below EUR 27,500)	10%
Passenger cars (EUR 27,500 – EUR 35,000)	27.5%
Passenger cars (above EUR 35,000)	35%
Electric vehicles (below EUR 62,000)	0%
Electric vehicles (EUR 62,000 or more)	10%
Entertainment expenses	10%
Undocumented per diem allowances	50%
Profits distributed by a loss-making company	35%

The corporate tax incentives that matter most to SMEs in 2026

ICE — Incentive for the Capitalisation of Companies: a deduction of 5.4% per year on eligible increases in equity (a 4.5% base rate uplifted by 20% for SMEs).

SIFIDE II — R&D: a tax credit of 32.5% of eligible research and development spending (47.5% for companies in their first two years of activity).

RFAI — investment: a tax credit of 25% to 30% on investment in eligible assets in incentivised regions, carried forward for up to 10 years.

Pay-rise incentive: a deduction of 150% of the cost of salary increases above 4.6%, provided the employees stay under contract for at least 3 years.

Form Modelo 22 — 2026 deadlines

Filing: by 31 May 2026 (for the 2025 financial year)
Payment of the IRC balance: by 31 May 2026
IES (annual simplified business information): by 15 July 2026

Key Takeaways

FAQ

What is the IRC rate for SMEs in Portugal in 2026?

The IRC rate for SMEs in Portugal in 2026 is 15% on the first EUR 50,000 of taxable profit (art. 87(2) of the CIRC, as amended by Law 64/2025), and 19% on profit above that (art. 87(1) of the CIRC and art. 3(2) of Law 64/2025). For SME startups in their first two profitable years, the rate is 12.5% up to EUR 50,000.

Who is considered an SME for IRC purposes in 2026?

A company is an SME if it meets at least two of three criteria: a balance-sheet total under EUR 4 million; turnover under EUR 8 million; fewer than 50 employees.

Are IRC payments on account mandatory for all companies?

No. Companies in their first year of activity and companies with prior-year turnover under EUR 500,000 are exempt from payments on account. The SMEs exempt from the first payment on account are those with turnover up to EUR 500,000.

What are autonomous taxations in IRC?

Autonomous taxations are rates applied to certain business expenses (vehicles, entertainment, undocumented allowances, profits distributed by loss-making companies), regardless of whether the company has a profit or a loss. They are computed on the Modelo 22 and paid together with IRC.

What is the IRC Modelo 22 filing deadline in 2026?

The Modelo 22 for the 2025 financial year must be filed by 19 June 2026 (the standard rule is 31 May, but it was extended for 2026). The IES (Simplified Business Information) must be filed by 15 July 2026.