Tax Obligations for a New Company in Portugal 2026 — What to Do First
Once a company is incorporated in Portugal, the first two critical deadlines are: the declaration of commencement of activity with the tax authority within 15 days, and registration with social security within 10 days. After that, the company must appoint a Chartered Accountant (OCC), issue invoices using software certified by the tax authority, and file its first periodic VAT return within the deadline for the regime it has chosen.
Calendar: the first 90 days after incorporation
| Deadline | Obligation | Where | Who does it |
|---|---|---|---|
| Day 1 | Open a business bank account | Bank of your choice | Director / shareholders |
| Within 15 days | Declaration of commencement of activity | Tax authority portal | Chartered Accountant (OCC) |
| Within 10 days of starting activity | Register the company with social security | Segurança Social Direta | Director or accountant |
| Immediately | Activate certified invoicing software | A supplier certified by the tax authority | Director |
| Immediately | Complaints book (physical or electronic) | Only for activities open to the public | Director |
| By the end of the month | Register employees with social security (if any) | Segurança Social Direta | Accountant |
| Monthly or quarterly | Periodic VAT return | Tax authority portal | Chartered Accountant (OCC) |
| Monthly | Filing the invoicing SAF-T file | Tax authority portal | Chartered Accountant (OCC) |
| By the 10th of the following month | DMR — monthly remuneration return (if you have employees) | Tax authority portal | Chartered Accountant (OCC) |
| July of the following year | IES — annual simplified business information | Tax authority portal | Chartered Accountant (OCC) |
| May/June of the following year | Modelo 22 — annual corporate income tax return | Tax authority portal | Chartered Accountant (OCC) |
VAT status — standard regime or exemption?
One of the first tax decisions for a new company is its VAT position:
VAT exemption (article 53 of the VAT Code)
Companies with expected turnover up to EUR 15,000 a year (art. 53(1) of the VAT Code, as enacted by Decree-Law 35/2025) can elect for VAT exemption when they start trading. They do not charge VAT to customers, but equally cannot reclaim VAT on purchases. This suits businesses with few suppliers and customers who cannot reclaim VAT themselves (private individuals).
Standard VAT regime
This applies where expected turnover exceeds EUR 15,000 a year, or where the company elects into the standard regime voluntarily. The periodic return is:
- Monthly — for companies with turnover above EUR 650,000 in the previous year
- Quarterly — for everyone else (the general rule when starting out)
VAT rates in 2026
- Standard rate: 23% (most goods and services)
- Intermediate rate: 13% (restaurants, some foodstuffs)
- Reduced rate: 6% (essential foodstuffs, medicines, books, and from 2026 residential construction contracts)
Corporate income tax
Companies in Portugal pay corporate income tax on their profits. The 2026 rates are:
- 19% — the general rate (art. 87(1) of the Corporate Income Tax Code; Law 64/2025)
- 15% — the reduced rate for SMEs and small mid caps on the first EUR 50,000 of taxable income (19% above that; art. 87(2) of the Code)
- 12.5% — the rate for companies in inland territories on the first EUR 50,000 (in their first 2 financial years)
In their first financial year, new companies make no payments on account. Payments on account start in the second year, calculated on the tax paid in the previous one.
Social security — mandatory contributions
A company with employees pays social security:
- 23.75% of gross pay (the employer’s contribution, borne by the company)
- 11% of gross pay (the employee’s share, deducted from the payslip)
A director of an Lda who draws remuneration must be registered with social security as an employee (11% employee plus 23.75% company, on the declared remuneration).
Invoicing software — required immediately
Since 2013, every company in Portugal with turnover above EUR 50,000 a year has been required to use invoicing software certified by the tax authority. In practice, any new company should adopt certified software straight away — issuing invoices by hand or in a spreadsheet is not lawful.
The invoicing SAF-T file, a monthly file containing every invoice, must be submitted through the tax authority portal each month.
The Chartered Accountant — a legal requirement and a strategic partner
Appointing a Chartered Accountant registered with the Order of Chartered Accountants (OCC) is required by law for companies keeping full statutory accounts. The accountant signs every tax filing and is jointly responsible for the company’s accounting compliance.
Beyond the legal requirement, the accountant is the company’s first tax adviser, and should be consulted before significant decisions such as distributing profits, hiring, investing or restructuring.
→ See also: How to Open a Company in Portugal in 2026 — Full Guide
HVR is with your company from day one
We handle the declaration of commencement of activity, social security registration, activating your invoicing software and all monthly accounting. No surprises, no missed deadlines. Packages from EUR 150 a month.
Talk to Hugo Ribeiro — free diagnostic →Frequently asked questions
What is the deadline to declare commencement of activity after incorporating?
15 days after the company is incorporated. The declaration is filed through the tax authority portal by the company’s Chartered Accountant. Missing the deadline carries a fine.
Do I need an accountant from the start?
Yes. For companies keeping full statutory accounts (every Lda and SA), appointing a Chartered Accountant is required by law. They must be named on the tax authority portal by the date activity commences.
When does a new company start paying VAT?
Immediately after commencing activity, if it is in the standard regime. The first periodic VAT return is quarterly (the general rule for new companies turning over up to EUR 650,000 a year). Companies with expected turnover up to EUR 15,000 a year can elect for the exemption in article 53 of the VAT Code (as enacted by Decree-Law 35/2025).
Does a new company pay corporate tax in its first year?
Yes, on the profits of its first financial year. It does not, however, make payments on account during that first year — the tax is paid with the Modelo 22 return in May or June of the following year. Payments on account start from the second financial year.
What is SAF-T and when is it filed?
SAF-T (Standard Audit File for Tax) is a monthly file containing every invoicing document issued. It must be submitted through the tax authority portal by the 5th of the following month (art. 3 of Decree-Law 198/2012). Certified invoicing software generates it automatically.
When is the first monthly remuneration return (DMR) due?
The monthly remuneration return (DMR) is due by the 10th of the month following the one the income relates to (art. 119(1)(c) of the Personal Income Tax Code). The accountant files it through the tax authority portal, and social security uses it to confirm contributions.