Key facts Portugal taxation

The combination of Portugal's economic liberality, healthy relationship with the EU, prime geographical location and one of the lowest operational costs in Western Europe make it an organic gateway between the EU and other world markets. Portugal actively seeks foreign investment, and provides subsidies to many investments.

Shareholders company (SA):

  • Minimum share capital is EUR 50.000
  • minimum five shareholders required, however this can be reduced over time
  • actual set up can be made with one shareholder, except in the case of Madeira offshore companies and subsidiaries of a holding company
  • Submission of annual financial statements is required

Limited liability company (LDA):

  • minimum share capital is EUR 1
  • at least one shareholder required, resident or non-resident
  • at least one director required, resident or non-resident
  • liabilities are limited to the amount invested
  • local registered office is required
  • Submission of annual financial statements is required


  • Corporate tax rate is 21%, reduced rate of 17% applies to the first EUR 15,000 of taxable profits of small and medium-sized enterprises
  • capital gains are included in taxable profits for corporate tax purposes, but gains on the disposal of shares may be exempt from tax
  • Dividends paid to a nonresident company are subject to withholding tax at 25% (35% if paid to a resident of a listed tax haven)
  • Dividends received and capital gains realized by a resident company from a domestic or foreign shareholding are exempt from tax, provided the shareholder is not considered a transparent entity and has held, directly or indirectly, at least 10% of the capital or voting rights of the other company for at least 12 months
  • VAT generally is levied on the supply of goods and services, and on imports. For the mainland, a standard rate of 23%, an intermediate rate of 13% and a reduced rate of 6% apply. The rates are 22%, 12% and 5% in Madeira, and 18%, 9% and 4% in the Azores
  • Up to 50% of income derived from licensing of patents, designs and industrial models is tax exempt
  • Royalty payments made to a nonresident company are subject to withholding tax at 25% (35% if paid to a resident of a listed tax haven), unless the rate is reduced under a tax treaty. Under the EU interest and royalties directive, payments to qualifying EU recipients are exempt
  • Losses may be carried forward for five years (12 years for small and medium-sized enterprises). The losses used in any year may not exceed 70% of the taxable profits