Portugal's 2027 State Budget was tabled in Parliament on 8 October 2026 (bill reference PL 487/XXV/2026, presented under Article 197(1)(d) of the Constitution). None of it is law yet: the final vote is set for 24 November and the text can still change in committee. This article reads the bill itself rather than the press releases — starting with the headline that is wrong.

The corporate tax cut to 18% is not a measure of this budget

This is the most repeated error in the coverage. The 2027 budget bill does not change the corporate income tax rate. We searched all 232 pages of the bill: there is no article amending the Corporate Income Tax Code (CIRC). IRC appears only for revenue earmarking (Article 66, up to €484,711,257), for the municipal surcharge, and to switch off the autonomous taxation surcharge discussed below.

The drop to 18% in 2027 was already law before this budget existed. It comes from Law 64/2025 of 7 November, whose transitional rule in Article 3 set the path: 19% for tax periods beginning in 2026, 18% for those beginning in 2027, and 17% from 1 January 2028. The body of Article 87(1) CIRC already reads 17%, but that rate only applies from 2028.

The distinction matters in practice. The applicable rate depends on when the tax period begins, not on when profit is earned. For companies whose tax period matches the calendar year the two coincide; for everyone else they do not.

Personal income tax: brackets up 3.88%, rates down in six of nine

Article 60 of the bill amends Articles 12-A, 68, 68-A and 70 of the Personal Income Tax Code (CIRS). This is the table proposed for 2027, transcribed from the bill:

Taxable income (euros)	Normal rate (A)	Average rate (B)
Up to 8,666	12.20%	12.200%
8,666 to 13,075	15.20%	13.212%
13,075 to 18,530	20.70%	15.416%
18,530 to 23,985	23.60%	17.277%
23,985 to 30,538	30.60%	20.136%
30,538 to 44,762	34.60%	24.732%
44,762 to 48,373	43.10%	26.104%
48,373 to 89,995	44.60%	34.658%
Above 89,995	48.00%	—

The nine bracket thresholds rise 3.88% against the table in force for 2026 — the first moves from €8,342 to €8,666. Rates fall in the first six brackets: 0.3 points in the first and sixth, 0.5 points from the second to the fifth. The top three brackets stay at 43.10%, 44.60% and 48%.

One caveat worth stating: a further reduction in the rates applying to 2026 income is being debated separately in Parliament. If it passes, the comparison base shifts and the gap between 2026 and 2027 will not be the one described above. The 2027 table we transcribe is the bill's; the 2026 one may still move.

Solidarity surcharge

The proposed Article 68-A applies 2.5% to the slice of taxable income between €89,995 and €250,000 and 5% above €250,000. The 2.5% entry threshold now lines up with the start of the top income tax bracket.

Subsistence minimum

Article 70 sets the reference value at the higher of €13,580 and 1.5 × 14 × IAS (the social support index). For 2026 that reference value is €12,880.

The Return Programme

Article 12-A CIRS — which is the Return Programme, not the Young IRS regime — is extended to those who become tax resident by 2027.

Three January deadlines almost nobody is covering

Article 77 of the bill, under the unassuming heading "transitional provisions on tax obligations", is probably the part with the most immediate practical effect for businesses.

1. Inventories: the valuation waiver widens to everyone

Paragraph 1 waives the obligation to value inventories in the filing required by Article 3-A of Decree-Law 198/2012 of 24 August:

• All taxpayers, for the tax period beginning on or after 1 January 2026;
• Taxpayers not required to keep perpetual inventory, for the period beginning on or after the law enters into force.

This is a real change from the previous budget. The 2026 budget had waived valuation only for those not required to keep perpetual inventory, which meant companies under that obligation would have to file a valued inventory for 2026 by 31 January 2027. If this bill passes as drafted, that obligation disappears for everyone in that period.

Note what does not change: filing the inventory remains mandatory, with the same 31 January deadline. What is waived is the valuation, not the filing. And until the law is passed and published, the previous rules apply.

2. Accounting SAF-T postponed again

Paragraph 2 provides that submission of the accounting SAF-T (PT) file under Ministerial Order 31/2019 of 24 January applies to 2028 and subsequent periods, to be filed in 2029 or later. It is one more postponement of an obligation that has been pushed back repeatedly.

3. PDF invoices accepted until the end of 2027

Paragraph 3 provides that until 31 December 2027 invoices in PDF format are accepted and treated as electronic invoices for all tax purposes.

Autonomous taxation: the loss-making surcharge is switched off for 2027

Paragraph 5 of the same Article 77 disapplies Article 88(14) CIRC — the 10 percentage point increase in autonomous taxation for companies reporting a tax loss — for the 2027 tax period, where:

• the taxpayer had taxable profit in one of the three preceding periods and met the filing obligations of Articles 120 and 121 CIRC for the two preceding periods; or
• the period is the first year of activity or one of the two following.

Look closely at the second condition in the first limb, because it is the one that catches companies out: having made a profit is not enough. The corporate tax return (Modelo 22) and the annual filing (IES) must have been submitted on time in the two preceding years. A late filing in 2025 or 2026 could cost the extra 10 points in 2027.

Productivity bonuses keep their exemption

Article 78 keeps amounts paid as productivity bonuses, performance bonuses, profit shares and balance-sheet gratuities exempt from personal income tax up to 6% of the employee's annual base pay, while the law is in force.

What to do with this now

Until the law is voted and published, none of this applies. What is worth doing today:

• Do not reset your corporate tax planning on the back of the budget. The 18% for 2027 was already in Law 64/2025 and depends on when your tax period starts.
• Check your last two years of filings. A late Modelo 22 or IES may mean the autonomous taxation relief does not apply to your company.
• Prepare the 31 January inventory filing anyway. The waiver covers valuation, not filing, and only exists if the bill passes.
• Follow the committee stage. The final vote is set for 24 November; the text can change until then.

To see the effect on your own numbers, try the net salary calculator and the autonomous taxation calculator, or talk to us through the CFO 360 Diagnostic.

Frequently asked questions

Is Portugal's 2027 State Budget already in force?

No. The bill was tabled in Parliament on 8 October 2026 and the final vote is scheduled for 24 November 2026. Until it is approved, published in the official gazette and enters into force, the previous rules apply. The text can still be amended during the committee stage.

Does the 2027 budget cut corporate tax to 18%?

No, and this is the most common confusion. The 2027 budget bill contains no article amending the Corporate Income Tax Code. The cut to 18% was already set by Law 64/2025 of 7 November, whose transitional rule in Article 3 establishes 19% for tax periods beginning in 2026, 18% for those beginning in 2027 and 17% from 1 January 2028.

What are the proposed 2027 income tax brackets?

The nine bracket thresholds rise by 3.88%, with the first moving from €8,342 to €8,666. The proposed normal rates are 12.20%, 15.20%, 20.70%, 23.60%, 30.60%, 34.60%, 43.10%, 44.60% and 48%. Rates fall in the first six brackets: 0.3 percentage points in the first and sixth and 0.5 points from the second to the fifth.

Will I have to value my 2026 inventory?

If the bill passes as drafted, no. Article 77(1)(a) waives the valuation obligation for all taxpayers in respect of the tax period beginning on or after 1 January 2026. Filing the inventory with the tax authority remains mandatory and keeps the 31 January deadline — what is waived is the valuation, not the filing.

Does the loss-making autonomous taxation surcharge apply in 2027?

The bill switches it off, but with conditions. Article 77(5) provides that Article 88(14) CIRC does not apply in the 2027 tax period where the company had taxable profit in one of the three preceding periods and met the filing obligations of Articles 120 and 121 CIRC in the two preceding periods, or where it is the first year of activity or one of the two following. A Modelo 22 or IES filed late can forfeit the relief.

When does the accounting SAF-T become mandatory?

The bill postpones it again: Article 77(2) provides that submission of the accounting SAF-T (PT) file under Ministerial Order 31/2019 of 24 January applies to 2028 and subsequent periods, to be filed in 2029 or later.

Source: the 2027 State Budget bill (PL 487/XXV/2026), text published by the Ministry of Finance, consulted on 9 October 2026. Every figure cited was read in the bill itself. This article describes a proposal and will be updated after the final vote.