From corporate income tax to accounting: what’s changing for businesses in 2025
The 2026 State Budget and autonomous measures approved by Parliament introduce changes for businesses effective January 1, 2026.
The year 2026 brings new developments for businesses in the area of taxation. The corporate income tax rate drops by one percentage point to 19%, the government is once again suspending increases in autonomous taxes, the period for claiming the Free Zone tax benefit is being extended, and the indirect SIFIDE is being phased out. These are the main changes for businesses next year.
Corporate income tax rate drops to 19%
Companies will pay less corporate income tax. Following a one-percentage-point reduction in the rate—from 21% to 20% in 2025—the reduction will be repeated, with the corporate income tax rate falling to 19%. For SMEs and small- and mid-cap companies, starting in 2026, the corporate income tax rate applicable to the first €50,000 of taxable income will be 15%.
Suspension of the Increase in Autonomous Tax Rates
Companies reporting losses will once again be exempt for another year from a 10-percentage-point penalty on autonomous corporate income tax rates, according to an amendment proposed by the PSD and CDS to the 2026 State Budget, which has been approved in committee.
This provision of the corporate income tax code has been temporarily suspended by various State Budget laws since the pandemic, but this year the government decided not to include it in its proposal. At issue is an additional tax applied to certain business expenses or charges, the most significant of which pertain to vehicles used by companies. And, in principle, there is no way to avoid them, not even in cases where the company, due to reporting a loss, has no corporate income tax to pay.
The code stipulates that autonomous tax rates are “increased by ten percentage points” for companies that report a tax loss in the relevant fiscal year, unless they are in their first or second year of operation.
Corporate Income Tax in the Madeira Free Zone
The corporate income tax benefit for companies licensed to operate in the Madeira Free Zone (ZFM) has been extended for another five years, until December 31, 2033, following the approval of an amendment proposed by PSD Madeira lawmakers. Had this amendment not been approved, the regime would have ended in 2028, in accordance with the current wording of the Tax Benefits Statute.
Thus, and in accordance with the proposal now approved, “the income of entities licensed to operate in the Madeira Free Zone from January 1, 2015, through December 31, 2026, is subject to corporate income tax (IRC) at a rate of 5% until December 31, 2033.”
Furthermore, “the partners or shareholders of companies licensed to operate in the Madeira Free Zone, who benefit from this regime, are exempt from personal income tax (IRS) or corporate income tax (IRC) until December 31, 2033,” as is currently the case, on profits made available to them by such companies, with the exception of those resulting from transactions with entities resident or domiciled in tax havens.
Mandatory Submission of the SAF-T Accounting File Postponed
The government has once again postponed the mandatory submission of the SAF-T accounting file, which contains all of a company’s accounting and tax information. “The submission of the SAF-T (PT) accounting file, under the terms defined by Ordinance No. 31/2019 of January 24, applies to periods beginning in 2027 and thereafter, to be submitted in 2028 or in subsequent periods,” states the State Budget. Currently, it was planned that this requirement would begin to be implemented for periods starting in 2026, with submission in 2027.
But this was not the only measure to be postponed once again. The requirement for electronic invoicing has also been postponed. “Until December 31, 2026, invoices in PDF format are accepted and considered electronic invoices for all purposes provided for in tax legislation,” the document states.
The requirements for issuing electronic invoices took effect for large companies in 2021. For smaller companies, this deadline had already been postponed for three consecutive years, with the current deadline for adopting electronic invoicing set for January 1, 2026. From that date forward, it will also be mandatory for all invoices to have a qualified digital signature.
Introduction of the VAT Group Scheme
Starting in January, a VAT group scheme will take effect, allowing economic groups to consolidate the amounts of tax owed to or recoverable from the government. Under this scheme, VAT balances owed or recoverable by members of a group of entities—linked by financial, economic, and organizational ties—are consolidated.
End of Indirect SIFIDE
The Government has introduced changes to SIFIDE, a tax benefit for corporate research and development. While the direct SIFIDE will continue, the indirect SIFIDE (through funds) will no longer apply. Nevertheless, the Government is extending the period for using existing stock in the funds from three to five years, but no new entries will be permitted as of January 1, 2026.
“ECO Sapo.pt”