An expense can be "put through the company" when it is incurred to obtain or secure business income and is duly documented with an invoice bearing the company's NIF (Tax Identification Number), as established in Article 23 of the Corporate Income Tax Code (CIRC). Expenses such as rent, salaries, fees, software acquisition, marketing, business travel, and materials are, in principle, deductible. Conversely, fines, expenses of a personal nature, and undocumented expenditures are not accepted. It is crucial to bear in mind that several deductible expenses are subject to autonomous taxation — for example, 10% on entertainment expenses and rates ranging from 8% to 32% on vehicle costs.

By Hugo Ribeiro, Certified Accountant OCC nº 64356 · HVR Business Consulting · August 2026

The Fundamental Principle of Deductibility: Article 23 of the CIRC

Portuguese tax legislation, specifically the Corporate Income Tax Code (CIRC), does not provide an exhaustive and closed list of all expenses that a company can deduct. Instead, it establishes a guiding principle, a "golden rule," which serves as the basis for analysing any expenditure. According to paragraph 1 of Article 23 of the CIRC, tax expenses are those that are demonstrably "indispensable for the generation of taxable income or for the maintenance of the income-producing source." This principle of indispensability is the central pillar supporting the tax acceptance of an expense.

In practice, for an expense to be tax-deductible, it must pass three essential tests, ensuring its compliance with the legislation:

1. Business Purpose Test (Indispensability): The expense must serve the interests and activity of the company, contributing to the generation or maintenance of its income. It cannot, under any circumstances, be confused with expenses of a personal nature incurred by partners, managers, or directors. This is the most subjective criterion and, at times, the most difficult to prove, requiring a clear justification of its connection to the business.
2. Documentation Test: The expense must be supported by a fiscally relevant document. The general rule is an invoice (or invoice-receipt) issued with the company's NIF. A simple till receipt without a NIF, a personal receipt, or a credit card transaction without the corresponding invoice are not considered sufficient documentary proof for tax purposes. The absence of a valid document irrevocably compromises the deductibility of the expense.
3. Accounting Record Test: The expense must be duly recorded in the company's accounts, in the tax period to which it relates, in accordance with the accruals basis (economic competence). This record must be clear, precise, and allow for its traceability and verification by the Tax and Customs Authority (AT).

Non-compliance with the documentation requirement is one of the most costly errors for companies. In addition to preventing the deduction of the expense for Corporate Income Tax (IRC) purposes, undocumented expenses are subject to severe autonomous taxation of 50%. Furthermore, if the AT disregards an expense due to lack of documentation or failure to meet the business purpose test, the company may be subject to tax adjustments, compensatory interest, and fines, significantly increasing the effective cost of the expense.

It is fundamental that company management and its accountant maintain constant communication to ensure that all expenses meet these three requirements, avoiding unpleasant surprises in the event of a tax inspection.

Categories of Clearly Deductible Expenses and Their Specificities

Although the law does not provide an exhaustive list, practice and the interpretation of the rules allow for the identification of a set of expense categories that, meeting the general criteria, are usually accepted as deductible. It is important, however, to be aware that, even within these categories, there may be specificities or limits to deduction.

CategoryCommon ExamplesEssential Notes and ConditionsPremises and EquipmentOffice/shop rent, water, electricity, gas, telecommunications, cleaning, asset insurance, maintenance works. Acquisition of computers, furniture, machinery, tools.Lease agreement in the company's name and invoices with the company's NIF. For acquisitions of investment goods (equipment) above certain values, the expense is deducted through depreciation over several years, according to the rates defined in Regulatory Decree No. 25/2009, of 14 September.Staff CostsSalaries, remuneration, allowances (holiday, Christmas, meal), Social Security contributions (TSU), work accident insurance premiums, professional training expenses.Must correspond to actual employment relationships or service provision. The meal allowance, for example, has exemption limits for TSU and Personal Income Tax (IRS), as defined by a Ministry of Finance ordinance (see the meal allowance guide for 2026 values).External ServicesFees for accountants, lawyers, consultants, security and surveillance services, software platforms (SaaS), database subscriptions, web hosting, maintenance services.Generally 100% deductible, provided they are duly invoiced to the company and related to its activity.CommunicationsMobile phone bills, fixed and mobile internet, landline phone.Contracts and invoices must be in the company's name. In situations of mixed use (professional and personal), the AT may require the delimitation of the professional portion.Marketing and AdvertisingExpenses with advertising in digital and traditional media, website development, participation in fairs and events, samples and low-value gifts, email marketing campaigns.Normally 100% deductible, provided they are duly invoiced and have the clear objective of promoting the company's activity.Business TravelTravel (plane, train), hotel accommodation, tolls, parking, car rental for business trips, per diems.Require a demonstrable professional reason (meeting agendas, invitations to fairs, client contracts). Per diems and mileage costs not invoiced to the client are subject to autonomous taxation (5%).Financial ChargesInterest on bank financing, bank commissions, credit insurance premiums.Are subject to deductibility limits in situations of excessive indebtedness (thin capitalization rules), as per Article 67 of the CIRC, which establishes rules for the deduction of net financing costs.Other Current ExpensesOffice supplies and consumables, fuel for company vehicles, tolls, postage and shipping costs.Must be invoiced to the company and demonstrably used in its activity.

What is NEVER Deductible (and the Consequences)

There are certain categories of expenses that are expressly excluded from tax deductibility, regardless of their nature or recording. Their inclusion as a company expense can lead to serious tax adjustments, compounded by interest and fines.

• Fines and Penalties: Fines, penalties, and other sanctions (e.g., improper parking, traffic infringements, tax or administrative offences) are considered non-deductible for IRC purposes. Article 23-A of the CIRC explicitly states that "fines, penalties, and other sanctions, including charges for their settlement, are not accepted as tax expenses."
• IRC Itself and Autonomous Taxation: Corporate Income Tax (IRC) and autonomous taxes paid by the company are not deductible for the calculation of taxable profit. They are, by nature, a cost of the final result and not an expense for obtaining that result.
• Personal Expenses of Partners or Employees: Any expense that directly benefits partners, managers, or employees personally, without a clear and direct link to the company's activity, is not deductible. Examples include supermarket purchases for domestic use, personal holidays, everyday clothing (except uniforms or PPE), luxury items without business justification. The AT may disregard these expenses and reclassify them as benefits in kind for the beneficiaries, with consequent implications for IRS and Social Security, in addition to penalties for the company.
• Expenses Without a Valid Document: As already mentioned, the absence of an invoice with the company's NIF makes the expense non-deductible. Even more seriously, these expenses are subject to autonomous taxation of 50% (Article 88, paragraph 1, point c) of the CIRC), which increases to 55% in the event of a tax loss.
• Confidential Expenses or with False Documents: Expenses that are not properly identified or that are supported by false, fraudulently obtained, or non-representative documentation of the actual operation. These situations constitute tax fraud and can lead to criminal sanctions for those responsible, in addition to severe tax penalties.
• High-Value Gifts and Giveaways: Although samples and low-value gifts for promotional purposes are deductible, high-value gifts that do not fall under entertainment expenses or do not have a clear commercial purpose may be questioned by the AT.

The correct identification and exclusion of these expenses is crucial to avoid tax contingencies and maintain company compliance.

The "Grey Areas": Interpretation and Specific Cautions

There are expenses whose deductibility is not straightforward and requires a more in-depth analysis, given their mixed nature or the need for additional justification. These are the "grey areas" that often generate doubts and are subject to scrutiny by the Tax Authority.

Can I "Put" Lunches Through the Company?

The issue of lunches is recurrent. Meals taken with clients, suppliers, or business partners, with the aim of promoting the company's activity, are considered entertainment expenses. These expenses are deductible for IRC purposes but are subject to autonomous taxation of 10% (Article 88, paragraph 1, point a) of the CIRC), which increases to 11% in the event of a tax loss. It is essential that these expenses are duly identified on the invoice (with the company's NIF) and that the purpose of the meeting can be proven (e.g., agenda, exchanged emails).

However, the daily lunch of a partner or employee, without an entertainment purpose, is not a company expense. For this purpose, there is the meal allowance, a social benefit that has a more favourable tax and social security regime within certain limits. For business travel (outside the usual workplace), meals may fall under the rules for per diems, provided they meet legal requirements and are supported by an invoice.

What About the Company Car?

The acquisition and costs associated with light passenger vehicles are one of the most complex topics and are subject to autonomous taxation. Vehicle depreciation, fuel, insurance, maintenance, and lease or long-term rental (AOV) costs are, in principle, deductible. However, all these costs are subject to autonomous taxation, which varies depending on the vehicle's acquisition cost and engine type. The rates are as follows, according to Article 88, paragraph 1, point d) of the CIRC:

• Internal combustion vehicles (petrol/diesel):
• Acquisition cost up to €25,000 (for 2026, may be updated): 8%
• Acquisition cost between €25,000 and €35,000: 25%
• Acquisition cost over €35,000: 32%
• Eligible plug-in hybrid vehicles (with minimum autonomy and battery of a certain capacity, to be verified annually):
• Acquisition cost up to €25,000: 2.5%
• Acquisition cost between €25,000 and €35,000: 7.5%
• Acquisition cost over €35,000: 15%
• Vehicles powered by Natural Gas for Vehicles (NGV) (with the same cost brackets): 2.5% / 7.5% / 15%
• 100% electric vehicles: Currently, costs associated with electric vehicles are exempt from autonomous taxation, making them the most favourable regime. However, there are limits on the acceptance of depreciation (and, by extension, AOV/leasing rents) for IRC purposes, which vary depending on the vehicle's acquisition cost.

Autonomous taxation rates increase by 10 percentage points if the company reports a tax loss in the period. Before making any decision on the acquisition of a vehicle by the company, it is crucial to conduct a detailed analysis of the total tax costs. Our vehicle simulator and the complete guide to autonomous vehicle taxation can assist in this assessment.

Mobile Phone and Home Internet?

The deduction of mobile phone and home internet expenses for a partner or employee is a "grey area." If the mobile phone has a contract in the company's name and its use is predominantly professional, the expense is deductible. However, if the mobile phone is personal and only a portion of the bill is attributed to the company, the AT may question the proportionality and proof of professional use. The ideal is to have a contract in the company's name, or a separate contract for professional use.

In the case of a partner's home internet, the situation is more complex. In a company, for the expense to be deductible, there should be a clear separation, such as an autonomous internet contract for the "home office" (if formally established as a company workplace). Otherwise, attributing a percentage of the domestic internet bill to the company is difficult to justify and may be challenged during an inspection.

Home Office (Teleworking)?

With the increase in teleworking, the issue of the home office has become more relevant. In a company, the company can formally rent a room in the partner's or an employee's home for office purposes, through a lease agreement. The rent paid by the company would be deductible for the company, and for the partner/employee, this rent would be considered rental income (IRS Category F), subject to taxation in their personal sphere. It is fundamental that the rent is at market value and that the space is effectively used for business purposes.

Attempting to "put" a percentage of the home's electricity, water, or condominium fees through the company, without a lease agreement or a clear and contractual allocation of the space, is an invitation for adjustments by the AT. The AT's guidelines on teleworking (Circular Letter No. 20241/2022) clarify some conditions for the deduction of additional expenses by teleworking employees, which can be paid by companies, but which have a specific framework and limits. For the company to deduct the expenses, they must be directly related to the activity and duly documented.

Clothing, Gym, Glasses?

Everyday clothing is not deductible. Only specific uniforms (with the company logo, for example) or Personal Protective Equipment (PPE) are accepted as expenses. Clothing that can be worn outside a professional context is considered for personal use.

Health and well-being (such as gym memberships, glasses, medical consultations) can only be deducted as social utility benefits (Article 43 of the CIRC). This means they must be general benefits, granted to all company employees, without discrimination. If it is an exclusive benefit for the managing partner alone, the AT may disregard the expense or reclassify it as a benefit in kind for the partner.

Business Trips vs. Holidays?

Travel with a demonstrable professional purpose (meetings, fairs, training, client visits, or site inspections) is deductible. It is essential to keep not only the invoice (hotel, transport) but also proof of the professional reason (agendas, invitations, emails, contacts). A trip that combines holidays with a business meeting, without a clear predominance of the professional objective and robust justification, is unlikely to pass an inspection test. The AT may require the separation of costs and only accept the strictly professional part.

The Trap of Autonomous Taxation 2026: Understanding Hidden Costs

The expression "put through the company" can be misleading. Many expenses, although deductible for the purpose of calculating taxable profit for IRC, are subject to an additional tax, known as autonomous taxation. This tax is a peculiarity of the Portuguese tax system and applies to certain expenses, regardless of whether the company has a profit or loss. Its main objective is to discourage certain expenses that, although they may have some connection to business activity, are seen as potential benefits for partners or managers, or have a luxury character.

The big "trap" is that autonomous taxation is due even if the company reports a tax loss in the period. In such cases, the autonomous taxation rates increase by 10 percentage points, becoming an even heavier burden. It is crucial for companies and their managers to understand this additional cost when planning their expenditures.

The main expenses subject to autonomous taxation for 2026 (values and brackets may be updated annually by the State Budget) are:

Type of ExpenseNormal Rate 2026Rate with Tax LossEntertainment expenses (meals, receptions, events, high-value gifts)10%20%Costs associated with light passenger vehicles, motorcycles, and mopeds (including depreciation, leases, fuel, insurance, and maintenance)Variable (see previous section)+10 p.p. (e.g., 8% -> 18%)Per diems and mileage costs not invoiced to clients (when there is no proven travel or values exceed legal limits)5%15%Undocumented expenses50%55%Costs of private use vehicles attributed to employees or members of corporate bodies (when not taxed under IRS)20%30%Costs of bonuses and awards paid to managers and directors (when representing more than 25% of annual remuneration)35%45%

Example of Autonomous Taxation Calculation:

A company recorded the following expenses in one year:

• Entertainment expenses (client lunches): €2,000
• Costs associated with an internal combustion vehicle (acquisition cost €30,000): €5,000
• Per diems paid to an employee, above legal limits: €500
• Undocumented expenses: €300

Scenario 1: Company with Taxable Profit

• Autonomous taxation on entertainment expenses: €2,000 * 10% = €200
• Autonomous taxation on vehicle costs (cost €30,000, rate 25%): €5,000 * 25% = €1,250
• Autonomous taxation on per diems: €500 * 5% = €25
• Autonomous taxation on undocumented expenses: €300 * 50% = €150
• Total Autonomous Taxation: €200 + €1,250 + €25 + €150 = €1,625

Scenario 2: Company with Tax Loss

• Autonomous taxation on entertainment expenses: €2,000 * 20% = €400
• Autonomous taxation on vehicle costs (cost €30,000, rate 35%): €5,000 * 35% = €1,750
• Autonomous taxation on per diems: €500 * 15% = €75
• Autonomous taxation on undocumented expenses: €300 * 55% = €165
• Total Autonomous Taxation: €400 + €1,750 + €75 + €165 = €2,390

This example demonstrates the significant impact of autonomous taxation, especially in a tax loss scenario. Proactive management and tax planning are crucial to minimise this burden. For more detailed strategies, consult our article autonomous taxation: how to minimise.

The Right Question Isn't "Can I Put It Through?" — It's "How Much Does It Cost to Put It Through?"

The mindset of "can I put this expense through the company?" is often reductive and can lead to suboptimal financial and tax decisions. The more pertinent and strategically correct question is: "What does this expense actually cost the company, considering all its tax implications?"

An expense of €100, if fully deductible and not subject to autonomous taxation, can result in an IRC saving of approximately €19 to €20.50 (considering the general IRC rate of 19% for 2026 — art. 87(1) of the CIRC and art. 3(2) of Law 64/2025 — and an average municipal surcharge of 1.5%, depending on the municipality). In other words, the net cost to the company would be €79.50 to €81.

However, if that same €100 expense is for entertainment, for example, it saves the same €19-€20.50 in IRC, but adds €10 in autonomous taxation (or €20 if the company has a loss). The effective net cost to the company could then be €89.50 to €91 (or €99.50 to €101 with a loss). This net cost analysis is fundamental for efficient financial management.

Even more seriously, if the expense is of a personal nature and is improperly attributed to the company, the consequences can be multiple and onerous:

• Disallowance of the Expense: The Tax Authority will disallow the expense, increasing the company's taxable profit and, consequently, the IRC payable.
• Compensatory Interest and Fines: Compensatory interest will be applied to the tax due and fines for tax infringement, which can be significant.
• Autonomous Taxation: If the expense is considered "undocumented" or unjustified, the company may be subject to autonomous taxation of 50% (or 55% with a loss).
• Reclassification as Personal Income: The value of the expense may be reclassified as a benefit in kind for the partner or manager who benefited from it, implying taxation under IRS and, potentially, Social Security contributions.

The role of the certified accountant is not simply to say "yes" to all requests for expense deductions. It is, rather, a strategic partner who helps to optimise the net tax cost of each decision, ensuring that the company operates within the law and minimises risks. This work involves a rigorous analysis of the indispensability, documentation, and total tax impact of each expense, including autonomous taxation and the potential for reclassification. It is precisely this proactive tax consultancy that we offer to over 200 companies in the HVR accounting plans — request a free diagnosis and discover how we can help your company manage its expenses more intelligently.

Common Mistakes to Avoid in Expense Management

Managing business expenses is a fertile ground for errors that can result in unexpected costs and problems with the Tax Authority. Identifying and avoiding these errors is crucial for the company's financial and fiscal health.

1. Invoices without the Company's NIF: This is the most basic and frequent error. Many entrepreneurs forget to request an invoice with the company's NIF, ending up with ATM receipts or invoices with a personal NIF. Without the company's NIF, the expense cannot be accepted for IRC or VAT purposes, and may even generate autonomous taxation of 50% if not properly justified.
2. Confusing Personal with Business Expenses: Using the company card for supermarket purchases, personal gym memberships, family holidays, or other private consumption expenses is a serious error. The AT has mechanisms to detect these situations, which can lead to the disallowance of the expense, autonomous taxation, and reclassification as a benefit in kind for the partner.
3. Lack of Justification for Entertainment and Travel Expenses: Although deductible, expenses such as client lunches or travel require clear justification of their business purpose. An invoice is not enough; evidence (agendas, emails, invitations) proving the connection to the business is needed. The absence of this justification can lead to the disallowance of the expense.
4. Ignoring Autonomous Taxation: Many companies, focusing only on IRC deductibility, forget the impact of autonomous taxation. This leads to misaligned budgets and unexpected tax costs, especially in years of tax loss.
5. Not Separating Personal and Business Bank Accounts: Mixing personal finances with those of the company makes control, traceability of operations, and proof of the business nature of expenses difficult. It is a discouraged practice and can raise suspicions in the event of an inspection.
6. Insufficient Documentation for Teleworking/Home Office Expenses: Without a formal lease agreement or a teleworking agreement specifying cost allocation, attempting to deduct a percentage of household expenses (electricity, water, internet) is risky and may be challenged by the AT.
7. Delay in Accounting Recording of Expenses: Expenses must be recorded in the period to which they relate, in accordance with the accruals principle. Delays or incorrect period recordings can lead to distortions in accounting and tax adjustments.

Frequently Asked Questions (FAQ)

What expenses can I put through the company?

You can deduct expenses incurred to obtain or secure business income, provided they are duly documented with an invoice bearing the company's NIF. Examples include rent, salaries, fees, software, communications, marketing, business travel, equipment, and external services, among others, as per Article 23 of the CIRC.

Can I deduct lunches and dinners?

Meals with clients, suppliers, or business partners are deductible as entertainment expenses, but are subject to autonomous taxation of 10% (20% with a tax loss). Daily meals for a partner or employees, without an entertainment purpose, are not company expenses; for this, there is the meal allowance or classification as per diems for business travel.

What happens if I put personal expenses through the company?

In the event of an inspection, the Tax Authority will disallow the expense (which increases the IRC payable, plus interest and fines). Furthermore, it may treat the amount as a benefit in kind for the partner or manager, with consequent implications for IRS and Social Security. If the expenses are considered undocumented or unjustified, they are also subject to 50% autonomous taxation (55% with a loss).

Do I always need an invoice with the company's NIF?

Yes, this is the most important and fundamental practical rule. For an expense to be tax-deductible, it must be supported by an invoice (or equivalent document) issued with the company's NIF. Receipts without NIF, personal receipts, or simple credit card transactions are not sufficient to support the deduction.

Is buying a car through the company worthwhile?

It depends on the acquisition value, engine type, and use. Vehicle costs (depreciation, fuel, maintenance, etc.) are subject to autonomous taxation, which varies between 8% and 32% for internal combustion vehicles, and between 2.5% and 15% for eligible plug-in hybrids. 100% electric vehicles are the most favourable, being exempt from autonomous taxation. Rates increase by 10 percentage points in the event of a tax loss. It is crucial to simulate total tax costs before deciding.

Is autonomous taxation paid even with a loss?

Yes, autonomous taxation is due regardless of whether the company reports a taxable profit or loss. Moreover, autonomous taxation rates increase by 10 percentage points when the company reports a tax loss in the period, making it an even higher cost.

What are the most important legal references for expense deductibility?

The main references are Article 23 of the Corporate Income Tax Code (CIRC) (principle of indispensability), Article 23-A of the CIRC (non-accepted expenses), Article 88 of the CIRC (autonomous taxation), and, for documentation, the VAT Code (Decree-Law No. 28/2019, of 15 February, on invoice issuance).

Can I deduct professional training expenses?

Yes, expenses for professional training of employees or members of corporate bodies are deductible, provided they align with the company's objectives and aim to improve their skills and productivity. They must be supported by an invoice with the company's NIF.

Conclusion: Proactive Management and Specialist Consulting

Managing expenses in a company, especially within the Portuguese tax context, is a process that demands meticulous attention, in-depth knowledge of legislation, and a strategic approach. As we have seen, the simple question "can I put this expense through the company?" is insufficient. The analysis must go far beyond IRC deductibility, encompassing the impact of autonomous taxation, documentation requirements, and the potential consequences of reclassification by the Tax Authority.

Deciding expense by expense is easier with an accountant on hand: see what each of HVR's monthly accounting packages covers.

The key to efficient and fiscally optimised expense management lies in:

1. Knowledge and Updates: Staying abreast of constant legislative changes and interpretations by the Tax Authority.
2. Rigorous Documentation: Always demanding invoices with the company's NIF and retaining all relevant supporting documents to justify the business nature of the expense.
3. Clear Separation: Strictly distinguishing business expenses from personal ones, avoiding the confusion of assets and purposes.
4. Net Cost Analysis: Evaluating the real cost of each expense, considering not only IRC savings but also the impact of autonomous taxation and the risk of penalties.
5. Constant Communication with the Accountant: The certified accountant who keeps your books is your main ally. Open and regular communication allows for anticipating problems, clarifying doubts, and making informed decisions, ensuring tax compliance and cost optimisation.

At HVR Business Consulting, we understand the complexity and importance of these decisions. Our team of certified accountants is prepared to offer not only compliance with tax obligations but also strategic consulting aimed at maximising your company's tax efficiency, minimising risks, and optimising your return. Investing in proactive expense management and specialist consulting is investing in the sustainability and growth of your business.

Do not let tax "traps" compromise your company's success. Contact us today for a free diagnosis and discover how we can be your strategic partner in tax and accounting management.

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Sources and Legal References

• Corporate Income Tax Code (CIRC):
• Article 23: Expenses for determining taxable profit.
• Article 23-A: Non-accepted expenses as costs.
• Article 43: Social utility benefits.
• Article 67: Financing costs.
• Article 88: Autonomous taxation.
• Value Added Tax Code (CIVA):
• Article 19: Right to deduction.
• Decree-Law No. 28/2019, of 15 February: Regime for goods in circulation and invoice requirements.
• Regulatory Decree No. 25/2009, of 14 September: Depreciation and amortisation rates.
• Personal Income Tax Code (CIRS):
• Article 2: Category A Income (Employment Income).
• Article 8: Benefits in kind.
• Article 8-A: Category F Income (Rental Income).
• Circular Letter No. 20241/2022, of the Tax and Customs Authority: Clarifications on the tax regime for teleworking.
• Ordinance No. 1553/2007, of 5 December: Meal allowance values for IRS and Social Security exemption purposes (values updated annually).