Lisbon, Oct. 15, 2025 (Lusa) - Parliament on Wednesday approved, in a specialised session, the government's bill to reduce the corporate income tax rate to 19% in 2026 and for it to continue to fall in the following two years, until it reaches 17% in 2028.
In the Budget, Finance and Public Administration Committee (COFAP), the reduction in general rates was approved with the votes of the PSD, CDS-PP and Chega. The PS voted against.
In the bill, the government proposes that parliament reduce the general corporate income tax rate over the next three years, until it reaches 17% in 2028. The rate would fall from the current 20% to 19% next year, to 18% in 2027, and to 17% from 2028 onwards.
In addition to the decrease in the general rate, a reduction in the rate that applies to the first slice of the profits of small or medium-sized companies and companies with a small or medium capitalisation, to 15% from 2026, was also approved in the specialised section.
At the moment, the rate that applies to the first €50,000 of taxable income for SMEs is already lower than the general CIT rate, at 16%.
The reduction in the SME rate was voted on separately in the specialised section, at the request of the PS parliamentary group. The PS abstained on this reduction. The PSD, CDS-PP and Chega voted in favour of the reduction.
During the committee's discussion of the measure, PSD MP Hugo Carneiro welcomed the fact that it had been possible to "find a comfortable majority in parliament" to approve a reduction which, he said, had been "a battle" for "probably more than a decade".
"What we're doing today is giving a signal to all those who are entrepreneurs that it's worth investing in our country, that they'll have the support of this reduction in corporate income tax so that they can continue to invest and create jobs and improve salaries," he said.
In the opposite direction, PS deputy António Mendonça Mendes said, ironically, that he endorsed the PSD deputy's statement, saying that he has "great expectations, after this approval, that Portugal will grow again, as it did in 2023, more than 3%".
CDS-PP MP Paulo Núncio referred to 2026 as a "historic year" because, for the first time, the general rate will be below 20%.
Recalling that the agreement signed during the “troika” period (in 2023) between the PSD/CDS-PP and the PS for the corporate income tax rate to fall to 17% was not fulfilled by the Socialist Party, Núncio referred to the last ten years as "a lost decade" for growth and investment in the country.
"Fortunately, this path has been resumed," he said. For the CDS, the tax cut will be fundamental to Portugal's growth. "It's a good day for Portugal, it's a good day for the economy, it's a good day for companies, it's a good day for Portuguese workers," he emphasised.
For his part, Chega MP João Ribeiro recalled that the party had argued that the state surcharge - a corporate tax surcharge levied on the largest companies, with profits above €1.5 million - should also "be lowered", but said that this "is a path that is being taken".
During the general debate on the proposal on 19 September, Finance Minister Joaquim Miranda Sarmento considered the reduction to be a "strategic choice" for the country, not only to promote growth and wages, but also "social cohesion".
The corporate tax relief, which will begin in the 2025 tax period with a drop in the general rate from 21% to 20%, will affect next year's public accounts.
In the report on the proposed State Budget for 2026, the government expects that reducing the rate by 1 percentage point will result in a loss of revenue of €300 million.
PCT/ADB // ADB.
Lusa
