Tax Authority has published Circular Letter No. 20288/2026 detailing municipal surcharge rates and exemptions for Corporate Income Tax (IRC) for fiscal year 2025.
Portugal’s Tax and Customs Authority has issued Circular Letter No. 20288/2026 on 2 February 2026, outlining municipal surcharge (derrama municipal) rates applicable to corporate taxable profits for the 2025 fiscal year.
The circular specifies standard rates, reduced rates, and exemptions for municipalities across mainland Portugal and the Autonomous Regions of the Azores and Madeira.
Standard rates typically range from 1.00% to 1.50%, although some municipalities apply rates as low as 0.01%.
Reduced rates and exemptions are available to taxpayers meeting municipal criteria. Common conditions include maintaining taxable profits below EUR 150,000, creating or maintaining jobs, investing in specific business activities, or establishing a registered head office within the municipality. Certain sectors, such as retail and restaurants in Barcelos, also qualify for reduced rates if turnover is below EUR 600,000.
The circular serves as an official guide for completing the Modelo 22 Corporate Income Tax Return, ensuring compliance with local municipal tax obligations.
