• Service: Tax, International Tax
  • Type: Regulatory update
  • Date: 9/13/2013

Portugal - Corporate income tax proposals for 2014 

September 13:  Portugal is currently considering measures that would reform the corporate income tax law. A goal is to increase the competiveness and environment for foreign investment in Portugal.

Among the measures being considered are proposals that would:

  • Reduce the rate of corporate income tax, with the rate reduction to be phased in beginning in 2014 and with an ultimate rate ranging between 19% and 17% by 2018
  • Provide a simplified tax regime for small business taxpayers
  • Allow a carryforward of tax losses for a 15-year period (increased from the current five-year period)
  • Reduce the threshold for the deduction of net interest and financing expenses to €1 million (the current threshold amount is €3 million)
  • Adopt a worldwide participation exemption regime for dividends received by Portuguese entities (currently, the regime only applies for dividends from a Portuguese or EU country source)
  • Allow an optional participation exemption for profits and losses of permanent establishments located abroad
  • Provide tax group relief, and reduce the minimum holding requirement from 90% to 70%
  • Combine and enhance the investment incentive tax regime and contractual investment incentive regime
  • Provide for a patent box regime
  • Allow 20-year amortization for intangible assets with no defined useful life

These proposals are currently at the public consultation stage, and thus are subject to amendment.

Read a September 2013 report [PDF 154 KB] prepared by the KPMG member firm in Portugal: Corporate Income Tax 2014

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