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Tax Benefits for Companies

Tax Benefits for Companies

In carrying out its activity, companies may access the tax benefits provided for in the Investment Tax Code which cover corporate income tax (IRC), surtaxes, stamp duty (IS), municipal property tax (IMI) and municipal transaction tax (IMT). In many cases local tax benefits can be added to these benefits, which are granted by Municipalities.

The set of simulators for the tax benefit scheme for companies is divided into the following areas:

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TAX SUPPORT SCHEME FOR INVESTMENT

For investment projects in the following areas: mining and manufacturing, tourism, including activities of relevance to tourism; IT and related activities and services; agricultural, aquaculture, fish farming, livestock and forestry activities; research and development and high-technology activities; information technologies and audio-visual and multimedia production; defence, environment, energy and telecommunications; shared services centres activities), independently of the amount the following tax benefits may also be granted:

a) IRC abatement of the following amounts for relevant applications:

    • In the case of investments carried out in regions eligible under the terms of sub-paragraph a) of paragraph no. 3 of article 107 of the Treaty on the Functioning of the European Union as set out in the table provided in paragraph no. 1 of article 43:
      • 25% of relevant applications, regarding the investment carried out up to the amount of (euro) 10 000 000;
      • 10% of the relevant applications, regarding the part of the investment carried out which exceeds the amount of (euro) 10 000 000;

    • In the case of investments in eligible regions under the terms of sub-paragraph c) of paragraph no. 3 of article 107 of the Treaty on the Functioning of the European Union as set out in the table provided in paragraph no. 1 of article 43, 10% of the relevant applications;

b) IMI exemption or reduction, for a period of up to 10 years, in respect of the buildings used by the promoter in the context of investments which constitute relevant applications. c) IMT exemption or reduction, in respect of the purchase of buildings which constitute relevant applications. d) Stamp Duty exemption regarding the purchase of buildings which constitute relevant applications.

Simulate

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CONTRACTUAL TAX BENEFITS FOR PRODUCTIVE INVESTMENT

Investment projects, where the relevant applications are of an amount equal to or greater than (euro) 3,000,000.00, (in the following areas: - mining and manufacturing industry; - tourism, including activities of interest to tourism; - IT and related activities and services; - agricultural, aquaculture, fish farming, livestock and forestry activities; - research and development and high-technology activities; - information and audio-visual and multimedia production technologies; - defence, environment, energy and telecommunications;- shared services centres activities), may be granted tax benefits, within a contractual scheme, for a period of up to 10 years. These investment projects may also, cumulatively, be granted the following tax benefits:

  • Tax credit, determined based on the application of the percentage, ranging between 10% to 25% of the relevant applications of the investment project actually carried out, to be deducted from the IRC due under the terms of sub-paragraph a of paragraph no. 1 of article 90 of the IRC code;

  • IMI exemption or reduction, during the period in force of the contract, regarding the buildings used by the promoter in the context of the investment project;

  • IMT exemption or reduction, regarding the purchases of buildings included within the investment plan and carried out during the investment period;

  • Stamp Duty exemption, regarding all the acts or contracts necessary to carry out the investment project.

Simulate

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TAX INCENTIVE SCHEME FOR RESEARCH AND BUSINESS DEVELOPMENT (SIFIDE II)

Investment projects in the areas of research and development may obtain significant financial benefits regarding corporate income tax. IRC taxpayers resident in Portuguese territory who carry out as their main activity, an activity of an agricultural, industrial, commercial and services nature and non-residents with a permanent establishment in this territory may reduce from their determined IRC amount and up to that same amount, the amount corresponding to the expenses for research and development, concerning the part that has not been subject to non-reimbursable financial support from the State, carried out within the tax periods starting from 1 January, 2014 and 31 December, 2020, within a double percentage:

  • Base rate - 32.5% of expenses realized in that period;

  • Incremental rate - 50% of the increase in expenses realized in that period regarding the simple arithmetic mean of the two previous financial years, up to a limit of (euro) 1,500,000.00.

For IRC taxpayers who fall into the category of micro, small or medium companies, which have still not completed two years of activities, a 15% increase on the basic rate will be applied.

Simulate

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VENTURE CAPITAL COMPANIES (SCR) AND VENTURE CAPITAL INVESTORS (ICR)

Venture capital companies may reduce their determined IRC amount and up to that same amount, an amount corresponding to the total of the sum of the determined IRC amount due for the five financial years prior to that regarding the benefit, provided that it is used in carrying out investments in companies with the potential for growth and enhancement.

The deduction is carried out when liquidating the IRC regarding the financial year in which the investments were carried out or, when this is not carried out fully, the amount not previously reduced may be so done, under the same conditions, in the liquidation of the five following financial years.

Shareholders of single person ICR companies, informal investors in companies channelling investment in companies with the potential for growth, certified within the scope of the COMPETE Programme, and informal investors in venture capital certified by IAPMEI, within the scope of the FINICIA Programme, may also within the scope of their determined IRC amount in that year, up to a limit of 15% of this, deduct an amount corresponding to 20% of the value invested by it or by the single shareholder ICR company of which they are a shareholder.

Simulate

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JOINT INVESTMENT AGENCIES

Real estate investors who are organized into one of the forms of collective investment undertaking, that is, in the form of a real estate investment fund or a real estate investment company, benefit from a special IRC tax regime and are exempt from surtaxes.

To calculate the taxable profit, capital and property income and capital gains are not considered, except when such income derives from entities residing or domiciled in a country, territory or region subject to a clearly more favourable tax regime as shown in the list approved by order of the member of the Government responsible for the area of finances.

Simulate

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SEED PROGRAM

Portugal has activie policies to support the creation of micro and small enterprises in the field of technology

This program allows part of the taxes paied by any contributor to be used to acquire stakes in micro and small companies certified by the national network of business incubators

Simulate