Portugal’s Finance Minister submitted the draft Budget Law for 2025 (Draft Law No. 26/XVI/1) to parliament on 10 October 2024, proposing reduced corporate tax rates for companies and SMEs and revised personal income tax rates and other tax measures.
The standard corporate tax rate will decrease from 21% to 20%, and the reduced rate for SMEs on the first EUR 50,000 of taxable income will drop from 17% to 16%.
Revised PIT rates
The revision of the personal income tax brackets/rates is as follows:
| Tax brackets | Rates |
| up to EUR 8,059 | 13.00% |
| over EUR 8,059 up to 12,160 | 16.50% |
| over EUR 12,160 up to 17,233 | 22.00% |
| over EUR 17,233 up to 22,306 | 25.00% |
| over EUR 22,306 up to 28,400 | 32.00% |
| over EUR 28,400 up to 41,629 | 35.50% |
| over EUR 41,629 up to 44,987 | 43.50% |
| over EUR 44,987 up to 83,696 | 45.00% |
| over EUR 83,696 | 48.00% |
Tax incentives for company capitalisation
The tax incentive amendment for company capitalisation involves raising the standard variable rate on eligible equity increases to the 12-month EURIBOR average plus 2.0% and increasing the deduction increase to 50% in 2025, instead of the planned 30% rate.
VAT exemption extension
The VAT exemption with deduction is extended until 31 December 2025, for fertilisers, soil conditioners, and products for feeding livestock used in agriculture, as well as for products intended for feeding companion animals by legally constituted animal protection associations.
Pending approval, the provisions of the 2025 Budget Law are expected to take effect on 1 January 2025.
