Paying Taxes in Portugal

1. What is the corporate tax in Portugal?

A company registered in Portugal is subject to a standard corporate tax rate of 25% if the income is over 12,500 EUR and 12.5% for less. For an income that exceeds 2 million euros, the corporate tax rate is higher with 2.5%.

2. What is the VAT in Portugal?

The standard Value Added Tax rate in Portugal is 23%, with some exceptions of 13% and 6% for some goods and services.

3. How can the VAT be refunded in Portugal?

If you want a refund for VAT in Portugal, you have to electronically submit your application through the Portuguese tax portal not later than 30th September of the following year. The documents requested for proof of eligibility for VAT refund, like invoices, may be uploaded.

4. What is the dividend tax in Portugal?

For a Portuguese company, the dividend tax rate for dividends paid to non-resident companies is 21.5%. There might also be the case of a tax treaty, under which the tax might be reduced.

5. Are there any incentives for foreign investors in Portugal?

Portugal tries to attract as many foreign investors as possible, with a business environment that is favorable through low labor costs and massive infrastructure. Besides, financial incentives are offers to foreign investors who choose to set up a company in Portugal. The type of incentive is also influenced by the amount of investment or the number of employees, but they mostly consist of tax deductions. For instance, companies that create jobs for young people benefit from a corporate tax reduction of 50% for salary payment.

6. Why do I need a local accountant for my business in Portugal?

It is recommended to hire a local accountant for your Portuguese company, since a local specialist will be able to deal more easily with the system of Portugal, that has been through many transformations over the past years. Therefore, a local accountant would learn faster to adapt to other changes in the system that may appear.

BridgeWest offers company formation in Portugal, including virtual office and other related services.