Portugal’s parliament has approved the Budget Bill 2025 on 29 November 2024.
The President will promulgate the 2025 Budget Bill, after which the corresponding law will be officially published.
Earlier, Portugal’s Finance Minister submitted the draft Budget Law for 2025 (Draft Law No. 26/XVI/1) to parliament on 10 October 2024. The new 2025 budget proposed reducing corporate tax rates for companies and SMEs and revised personal income tax rates.
The corporate tax rate (CIT) is set to decrease from 21% to 20%, while small and medium-sized enterprises (SMEs) will benefit from a reduced rate of 16% (down from the current 17%) on the first EUR 50,000 of taxable income. In addition, a reduced autonomous tax rate (approximately 0.5%) on vehicle-related expenses and an enhanced tax deduction for companies when increasing their capital have been introduced.
Personal income tax (PIT) changes include lower tax rates due to adjusted income thresholds and partial tax exemptions (100% to 25%) for young workers.
