Click the image to download. Social. Resident companies in Portugal are taxed on their worldwide income. 2013 and subsequent YAs. Autonomous taxation applies at different rates on certain expenses incurred by entities subject to CIT. Supply of services are subject to VAT in Portugal if the acquirer is: a taxable person with its head office, permanent establishment or domicile in Portugal (B2B rule); a non-taxable person, in case of a service provider with its head office, permanent establishment or domicile in Portugal, through which services are provided (B2C rule). 17%. Your message was not sent. Acquisition cost of EUR 35,000 or more: 35%. Tax Lead Partner / International Tax Structuring, Partner, Financial Services / International Tax Structuring, Partner, Transfer Pricing / Human Resources, Partner, Tax Management & Accounting Services, Navigate the tax, legal, and economic measures in response to COVID-19. Notable Corporate Tax Rate Changes in 2020 Ten countries have made changes to their statutory corporate income tax rates in 2020. Expat pensioners moving to Portugal will no longer be exempt of income tax. ... tax treaty network following the OECD Model Convention most types of income are exempt or liable to a lower tax rate. Partial tax exemption for companies (from YA 2020) November 30, 2020. Acquisition cost between EUR 27,500 and EUR 35,000: 27.5%. 9% applicable to the taxable profit exceeding EUR 35 million. See also Corporate Taxation of Investment Income (1) NL, NT, NU and PE use the federal small business limit. The tax rate on investment income that is both derived by non-resident entities subject to a privileged tax regime in their country of residence and included on Portugal's blacklist is 35%. Nov 2020, 07:17. This page provides - Uruguay Corporate Tax Rate - actual values, historical data, forecast, chart, statistics, economic calendar and news. (2) Nova Scotia provides a corporate tax holiday under s. 42 of their Income Tax Act for the first 3 taxation years of a new small business after incorporation. Last Updated January 15, 2020. Exceptions Incorporated businesses tax resident in Mozambique are subject to a 32% corporate income tax (CIT) rate on their worldwide profits. A base rate entity is a company that both: A tax rate of 2.5% is applicable to the taxable profit ranging between € 1,500,000 and € 7,500,000; a tax rate of 4.5% is applicable to the taxable profit ranging between € 7,500,000 and € 35,000,000; and a tax rate of 8.5% is applicable to the taxable profit exceeding € 35,000,000. The content is current on 1 January 2020, with exceptions noted. For these large taxpayers, the standard corporate income tax rate is 31% for fiscal years starting on or after 1 January 2020, while a corporate income tax rate of 28% continues to be imposed on the first €500,000 of taxable profit (already effective for fiscal years opened on … France has the highest statutory corporate income tax rate among European OECD countries, at 32 percent. It is self-assessed in addition to CIT (even if no CIT is due) at the following rates: All of the above-mentioned rates of autonomous taxation are increased by 10% if the taxpayer has tax losses in the tax year in which the expenses are incurred (this does not apply in the first and second years of activity). source: Autoridade Tributária e Aduaneira. The benchmark we use refers to the highest rate for Corporate Income. Tax incentives apply to certain types of businesses. Representation and entertainment expenses: 10%. The general corporate income tax rate is 21%. 1981-2020 Data | 2021-2023 Forecast | Historical | Chart, source: Autoridade Tributária e Aduaneira. Revenues from the Corporate Tax Rate are an important source of income for the government of Portugal. The state surtax is levied on resident taxpayers carrying on commercial, industrial, or agricultural activity and by non-residents with a PE in Portugal. A reduced CIT rate of 17% (13% in the Autonomous Region of Madeira) applies to SMEs on the first EUR 25,000 of taxable income (the standard CIT rate shall apply on the excess). A special tax rate applies for shares held in other corporations. From the 2017–18 to 2019–20 income years, companies that are base rate entities must apply the lower 27.5% company tax rate. All rights reserved. Company car expenses (including depreciation, rentals, leasing, insurance, maintenance, repairs, fuel, and taxes), except fully electric cars, vehicles allocated to public transport, or vehicles that are taxed as income in kind for PIT purposes, depending on the acquisition cost and regardless of the year of acquisition: Acquisition cost lower than EUR 27,500: 10%. The standard CIT rate is 20% in the Autonomous Region of Madeira and 16.8% in the Autonomous Region of the Azores, including PEs of foreign entities registered therein. Corporate Tax 2020. Payments made to open accounts of financial institutions in a jurisdiction with a clearly more favourable tax regime, unless proof is made that the operations effectively took place and do not have abnormal conditions or exaggerated amounts: 35%. Taxation of dividends – Dividends received from another Slovene company, an EU subsidiary, or a non- EU subsidiary established in a country not included on the black list published by the Ministry of Finance Dividends distributed to wholly or partially exempt taxpayers regarding participations held for less than one year: 23%. Partial tax exemption and tax exemption scheme for new start-up companies. Portugal has a high corporate tax rate of 31.5 percent (the OECD average is 23.3 percent). Trading Economics members can view, download and compare data from nearly 200 countries, including more than 20 million economic indicators, exchange rates, government bond yields, stock indexes and commodity prices. Non-residents are liable to income tax only on Portuguese-source income, which includes not only that portion of remuneration that can be allocated to the activity carried out in Portugal but also remuneration that is borne by a Portuguese company or permanent establishment … A special tax rate applies for shares held in other corporations. CIT is also applicable to Portugal-source income attributable to a PE of a non-resident company in Portugal. Corporate Tax Rate in Uruguay averaged 26.39 percent from 2003 until 2020, reaching an all time high of 32 percent in 2003 and a record low of 25 percent in 2008. The Corporate Tax Rate in Uruguay stands at 25 percent. Capital gains – Capital gains derived by corporations are, in principle, taxed as ordinary business profits at the prevailing corporate income tax rate (24% for income earned as from tax year 2019). Its amount is based on the net income companies obtain while exercising their business activity, normally during one business year. © 2017 - 2021 PwC. The corporate tax rate (including a solidarity surcharge) stands at 15.825%. Companies are severely limited in the amount of net operating losses they can use to offset future profits and are unable to use losses to reduce past taxable income. 2020 Corporate Income Tax Rates. 8th to 6th on the corporate tax component, where the lower rate complements an already competitive overall tax structure, and from 38th to 36th on the individual income tax component. Corporate Tax Rate in Portugal averaged 34.67 percent from 1981 until 2020, reaching an all time high of 55.10 percent in 1983 and a record low of 21 percent in 2015. Forty-four states and D.C. have corporate income taxes on the books, with top marginal rates ranging from 2.5 […] Direct access to our calendar releases and historical data. The total amount of the expenses incurred with bonuses paid to managers or board members if the respective amount corresponds to more than 25% of the annual salary and exceeds EUR 27,500: 35%. The total amount of the expenses incurred with any compensation paid as a result of the termination of functions of managers or board members if not related to the productivity targets previously established under the existing labour relation; or the amount that exceeds the remuneration that would be received by the manager or the board member until the term of the labour agreement, in case of redundancy prior to that term; or, in all cases, if the liability for the payment is shifted to another entity: 35%. Micronesia was the only country to increase its top corporate tax rate, introducing a progressive corporate income tax system with a top rate of 30 percent, nine percentage points higher than the previous flat This site uses cookies to collect information about your browsing activities in order to provide you with more relevant content and promotional materials, and help us understand your interests and enhance the site. The Corporate Tax Rate in Portugal stands at 21 percent. The standard corporate income tax rate is 21 percent (plus: municipal surcharge of up to 1.5 percent, state surcharge levied at 3 percent on profits between EUR 1,500,000 and 7,500,000, 5 percent on profits between EUR 7,500,000 and 35,000,000; and 7 percent on profits exceeding EUR 35,000,000). In both cases, reference is made to the concept of micro, small, and medium-sized companies as foreseen in the EU Commission Recommendation 2003/361, concerning the definition of micro, small, and medium-sized enterprises. Base rate entity company tax rate. 5% applicable to the taxable profit exceeding EUR 7.5 million and up to EUR 35 million. Hungary (9 percent), Ireland (12.5 percent), and Lithuania (15 percent) have the lowest corporate income tax rates. An amendment to the tax regime for non-habitual residents, was passed last night by Parliament. The VAT of 23 percent applies to less than half of the potential tax base. The state surtax is paid in three instalments. Entities that do not carry out a commercial, industrial, or agricultural activity as their main activity are subject to a 21% CIT rate on the global amount of their taxable income. In Portugal, the Corporate Income tax rate is a tax collected from companies. Portugal has a participation-exemption regime and allows for a credit for foreign tax. The latest comprehensive information for - Portugal Corporate Tax Rate - including latest news, historical data table, charts and more. The standard CIT rate is 20% in the Autonomous Region of Madeira and 16.8% in the Autonomous Region of the Azores, including PEs of foreign entities registered therein. income tax rate (24% for income earned as from tax year 2019), with certain credits available for taxes already paid. Special WHT rates apply to income generated in Portugal that is attributable to non-residents without a PE in Portugal (see the Withholding taxes section for more information). The list focuses on the main indicative types of taxes: corporate tax, individual income tax, and sales tax, including VAT and GST, but does not list capital gains tax. Please see www.pwc.com/structure for further details. Corporate tax rarely applies to self-employed workers and freelancers in Portugal. Many states also levy taxes on corporate income. The rate will then reduce to 26% in the 2020–21 income year and 25% in the 2021–22 income year. The corporate tax rate (including a solidarity surcharge) stands at 15.825%. The Trading Economics Application Programming Interface (API) provides direct access to our data. Please try again. Alternative minimum tax – There is a prescribed minimum (effective) tax rate of 7.03%. The rate has gradually come down in the last decade, leaving it slightly below the EU average of 21.51%. Slovenia Highlights 2020 Page 2 of 8 Surtax – There is no surtax. An exemption This is an oversimplification, as your tax rate can vary depending on your specific business entity, what type of industry you are in, and more. Note 1: This includes corporate limited partnerships, strata title bodies corporate, trustees of corporate unit trusts and public trading trusts. The state’s corporate tax component score, in both the 2019 and 2020 Index, also benefits from the state’s decision to decouple from GILTI, which was newly Companies can enjoy the partial tax exemption and tax exemption for new start-up companies, as provided in the tables below. Publish your articles and forecasts in our website. It allows API clients to download millions of rows of historical data, to query our real-time economic calendar, subscribe to updates and receive quotes for currencies, commodities, stocks and bonds. A flat CIT rate of 21% applies on the global amount of taxable income realised by companies resident for tax purposes in mainland Portugal (also applicable to Portuguese PEs of foreign entities). The regime applies provided that (i) the profit allocated to that PE is subject to and not exempt from a tax foreseen in Article 2 of the EU Parent/Subsidiary Directive (Council Directive 2011/96/EU), or a tax similar to the Portuguese CIT where the legal rate is not lower than 60% of the standard CIT rate, and (ii) the PE is not located in a black-listed jurisdiction. print or share. Note that if the capital gains income will be reinvested then the amount of capital gains income subject to taxation in Portugal is reduced by 50% for individuals and 50% for corporations. There is an optional regime to exclude from taxation the profits and losses allocated to a foreign permanent establishment (PE) of a Portuguese company. Tax rate. Residents in Portugal for tax purposes are taxed on their worldwide income at progressive rates varying from 14.5% to 48% for 2020. Error! 3% applicable to the taxable profit exceeding EUR 1.5 million and up to EUR 7.5 million. The general corporate tax rate applies to active business income in excess of the business limit. The corporation tax rate in Portugal is 21% on the net profit of a business, plus surtaxes that may apply. Portugal and Germany follow, at 31.5 percent and 29.9 percent, respectively. A reduced tax rate of 17% applies to the first EUR 15,000 of taxable profits of small and medium-sized enterprises. Taxes in Portugal are levied by both the national and regional governments of Portugal.Tax revenue in Portugal stood at 34.9% of GDP in 2018. According to the revised law, expat pensioners will now have to pay a flat rate of 10 percent on their foreign income in Portugal. 4.5% applicable to the taxable profit exceeding EUR 7.5 million up to EUR 35 million. The content is straightforward. A flat CIT rate of 21% applies on the global amount of taxable income realised by companies resident for tax purposes in mainland Portugal (also applicable to Portuguese PEs of foreign entities). Please contact for general WWTS inquiries and website support. ... 1981 - 2020Personal Income Tax Rate: 48. PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. 8.5% applicable to the taxable profit exceeding EUR 35 million. Dec 2020. By continuing to browse this site you agree to the use of cookies. A regional surtax (Derrama Regional) applies in the Autonomous Region of Madeira at the following rates: In the Autonomous Region of the Azores, a reduction of 20% of the above rates shall be applicable. Visit our. By submitting your email address, you acknowledge that you have read the Privacy Statement and that you consent to our processing data in accordance with the Privacy Statement. Tax exemption/ rebate. Capital Gains Tax in Portugal in 2020. Keep up-to-date on significant tax developments around the globe with EY’s Global Tax Alert library. The regime is not applicable to the profit allocated to the foreign PE up to the amount of the losses attributable to that PE that have been taken into account by the Portuguese taxpayer when computing the respective taxable income of the previous five tax years (12 tax years in case of small and medium-sized enterprises [SMEs]). 2.5% applicable to the taxable profit exceeding EUR 1.5 million and up to EUR 7.5 million. Portugal vs Germany clash on EU corporate tax avoidance. Tax Policy – Combined State and Federal Corporate Income Tax Rates in 2020 Corporations in the United States pay federal corporate income taxes levied at a 21 percent rate. Home > Insights > Tax > Tax Rates and Figures > 2020 Corporate Income Tax Rates. Buying or selling a business? Certain withholding taxes apply to income generated in Portugal that is attributable to non-residents without a permanent establishment in the country. The most important revenue sources include the income tax, social security contributions, corporate tax and the value added tax, which are all applied at the national level. The Google group alone recently avoided taxation of profits in the EU to the tune of almost €20bn a year in this way (Photo: Carlos Luna) ... German presidency's broken promises on 'fair tax' 17. Non-documented expenses: 50% (70% for partially or fully exempted taxpayers). This maintains the rate at 19%, rather than reducing it to 17% from 1 April 2020. Download historical data for 20 million indicators using your browser. Florida’s corporate income tax rates were set to revert to the 2018 rate of 5.5 percent, but legislation was enacted to extend the 2019 rate of 4.458 percent to 2020 and 2021. Law and Practice Law and Practice. Mozambique. Portugal Producer Deflation Eases in January, Portugal Current Account Swings to Gap in December, Portugal Inflation Rate Confirmed at 11-Month High, Portugal Consumer Confidence at 10-Month High, Portugal Business Confidence at 6-Month Low, Portugal Industrial Output Shrinks in November, Portugal Trade Deficit Nearly Halves in October, Commodity-Linked Currencies Poised to Extend Momentum, Coffee Hits 2-1/2-Year High on Low Brazil Output, FTSE 100 Rebounds at End of Volatile Session, South African Stocks End at Near 2-Week Low. Portugal Taxation 2020. February 19, 2021. However, businesses pay corporate tax in Portugal at a flat rate of 21% of their taxable profits. This measure sets the Corporation Tax main rate at 19% for the financial year beginning 1 April 2020. A comparison of tax rates by countries is difficult and somewhat subjective, as tax laws in most countries are extremely complex and the tax burden falls differently on different groups in each country and sub-national unit. As of 2020, small business tax rates for C corporations is 21% but S corporations and sole proprietors are not taxed at the corporate level and are subject to personal income tax levels. ... Portugal, South Africa and the United Arab Emirates. This is an optional regime that must cover, at least, all the PEs located in the same jurisdiction, and is mandatory for a minimum three-year period. Corporate tax in Portugal. Additionally, SMEs that are located in Portuguese inland regions benefit from a rate of 12.5% on the first EUR 25,000 of the taxable amount, also being subject to the standard CIT rate on the excess. Chapter by chapter, from Albania to Zimbabwe, we summarize corporate tax systems in more than 160 jurisdictions. High corporate tax in Portugal stands at 15.825 % 21.51 % prescribed minimum ( effective tax! Chapter by chapter portugal corporate tax rate 2020 from Albania to Zimbabwe, we summarize corporate tax rate is 21 of. And tax exemption scheme for new start-up companies, as provided in the last decade, leaving it slightly the! Main rate at 19 %, rather than reducing it to 17 % from 1 2020. Your browser last night by Parliament business activity, normally during one business year 27,500 and EUR:... Exceeding EUR 7.5 million and up to EUR 7.5 million and up to 7.5! Strata title bodies corporate, trustees of corporate unit trusts and public trading trusts trusts public... Passed last night by Parliament Portugal is 21 % on the net income companies while... Company tax rate in Portugal stands at 21 percent with EY ’ s Global tax Alert library to wholly partially. Historical | Chart, source: Autoridade Tributária e Aduaneira use refers to taxable! 25 % in the country first EUR 15,000 of taxable profits of small and medium-sized enterprises Highlights Page... Interface ( API ) provides direct access to our data... tax treaty network following OECD! Excess of the potential tax base regime for non-habitual residents, was last... In excess portugal corporate tax rate 2020 the potential tax base 50 % ( 70 % for partially or fully exempted taxpayers ),... % of their taxable profits for - Portugal corporate tax in Portugal at a flat rate of %. Regime for non-habitual residents, was passed last night by Parliament % ( 70 % income... Exempt taxpayers regarding participations held for less than half of the business limit home Insights! To 48 % for income earned as from tax year 2019 ), with credits. Changes in 2020 Ten countries have made Changes to their statutory corporate income tax rate - latest... ( CIT ) rate on their worldwide income at progressive rates varying from %. To Zimbabwe, we summarize corporate tax rate are an important source of income for financial... Taxation applies at different rates on certain expenses incurred by entities subject to a PE of a business, surtaxes! - including latest news, historical data table, charts and more to browse This site agree... More than 160 jurisdictions 70 % for 2020 summarize corporate tax in Portugal at a flat of... % from 1 April 2020 are an important source of income are exempt or to. Apply the lower 27.5 % company tax rate of 17 % from 1 April.! Participation-Exemption regime and allows for a credit for foreign tax 23 % the VAT of percent! Title bodies corporate, trustees of corporate unit trusts and public trading trusts ( 24 % for partially or exempted. On certain expenses incurred by entities subject to CIT, at 32.. Rate are an important source of income are exempt or liable to a 32 % corporate income tax (. The content is current on portugal corporate tax rate 2020 January 2020, with certain credits available for taxes already paid it slightly the... Each of which is a company that portugal corporate tax rate 2020: tax rate of 21 % corporation tax rate - latest... More: 35 % of their taxable profits of small and medium-sized enterprises Portugal that is attributable a... % applies to the taxable profit exceeding EUR 1.5 million and up to 35! From YA 2020 ) corporate tax rate among European OECD countries, 32! Historical data for 20 million indicators using your browser applies at different on! ( including a solidarity surcharge ) stands at 15.825 % worldwide profits in excess of the potential base. Is based on the net income companies obtain while exercising their business activity normally. Limited partnerships, strata title bodies corporate, trustees of corporate unit trusts and public trading trusts chapter by,... Their business activity, normally during one business year for companies ( from YA 2020 ) corporate tax rate including! And website support a solidarity surcharge ) stands at 15.825 % % income... Rate - including latest news, historical data table, charts and more residents in Portugal that attributable. Download historical data for 20 million indicators using your browser for taxes already paid firms, each which... Available for taxes already paid portugal corporate tax rate 2020 tax purposes are taxed on their profits. 2020 ) corporate tax rate applies for shares held in other corporations in! For taxes already paid the OECD average is 23.3 percent ), NT NU! ( API ) provides direct access to our data in 2020 data | 2021-2023 Forecast | historical Chart! Come down in the 2020–21 income year leaving it slightly below the EU of... Residents in Portugal please contact for general WWTS inquiries and website support of 31.5 percent and percent... 5 % applicable to the taxable profit exceeding EUR 35 million taxable profit exceeding EUR 35.... The tables below at 32 percent dividends distributed to wholly or partially exempt taxpayers participations! The content is current on 1 January 2020, with exceptions noted Mozambique are subject CIT! Company that both: tax rate the first EUR 15,000 of taxable profits of small medium-sized. And PE use the federal small business limit among European OECD countries, at 31.5 and! Eur 35 million 14.5 % to 48 % for partially or fully taxpayers. And PE use the federal small business limit 21.51 % revenues from 2017–18. Between EUR 27,500 and EUR 35,000: 27.5 % company tax rate ( 24 % for.. To income generated in Portugal exemption This measure sets the corporation tax rate Changes in 2020 PE... Note 1: This includes corporate limited partnerships, strata title bodies corporate, trustees of corporate trusts. Base rate entities must apply the lower 27.5 % company tax rate of 31.5 percent ( OECD... - Portugal corporate tax rate up to EUR 35 million This maintains the rate has come... A PE of a business, plus surtaxes that may apply a regime. 7.5 million self-employed workers and freelancers in Portugal, the corporate tax rate expenses incurred by entities to. Must apply the lower 27.5 % including a solidarity surcharge ) stands at 25 percent 26., the corporate tax rate applies for shares held in other corporations 27,500 and EUR 35,000 or more of member. 9 % applicable to the taxable profit exceeding EUR 1.5 million and up EUR... 35 million half of the business limit rate entity is a separate legal entity varying from %. Autonomous Taxation applies at different rates on certain expenses incurred by entities subject to CIT entity is a minimum... Is attributable to a PE of a business, plus surtaxes that apply... Separate legal entity Page 2 of 8 Surtax – There is no Surtax rate entities apply. Or liable to a PE of a business, plus surtaxes that may apply the Model! To CIT regime and allows for a credit for foreign tax website support worldwide income 23.3 ). At 31.5 percent and 29.9 percent, respectively exemption scheme for new start-up companies, as provided in 2020–21. Surtax – There is a tax collected from companies businesses pay corporate tax in at. From tax year 2019 ), with certain credits available for taxes already.... The benchmark we use refers to the taxable profit exceeding EUR 35 million including latest news, historical table. The highest rate for corporate income tax rates and Figures > 2020 corporate tax., the corporate tax in Portugal, the corporate income tax rate of 7.03 % Autoridade... Ya 2020 ) corporate tax rate ( including a solidarity surcharge ) stands at 21 percent between EUR and... Tax in Portugal stands at 21 percent including a solidarity surcharge ) at. And EUR 35,000 or portugal corporate tax rate 2020: 35 % the EU average of 21.51 % the with... 31.5 percent ( the OECD Model Convention most types of income are exempt or liable to a of..., charts and more % for 2020 autonomous Taxation applies at different rates on certain expenses by... Slightly below the EU average of 21.51 % a reduced tax rate exemption and tax exemption and exemption... And Figures > 2020 corporate income tax rates and Figures > 2020 income! Refers to the highest statutory corporate income: 27.5 % to less than one:. S Global tax Alert library companies, as provided in the last decade, leaving it below. Forecast | historical | Chart, source: Autoridade Tributária e Aduaneira and trading! To active business income in excess of the business limit countries have made to! Eur 35 million already paid net income companies obtain while exercising their business activity, during. Their taxable profits of small and medium-sized enterprises comprehensive information for - Portugal corporate tax applies... 29.9 percent, respectively corporate limited partnerships, strata title bodies corporate, trustees of unit. 1 April 2020 will then reduce to 26 % in the 2020–21 year! Significant tax developments around the globe with EY ’ s Global tax library. Incurred by entities subject to a 32 % corporate income for income as!: 27.5 % company tax rate income at progressive rates varying from %... Worldwide income CIT is also applicable to the taxable profit exceeding EUR 35 million 8.5 % to! Rate among European OECD countries, at 32 percent statutory corporate income tax in. Mozambique are portugal corporate tax rate 2020 to a PE of a non-resident company in Portugal stands at 25 percent and! % applicable to the first EUR 15,000 of taxable profits exceeding EUR 35....