Digest ยท Tuesday 10 November 2026
This week: the IRS cut is law, and the budget amendments are in
Six things that moved for foreign-owned companies in Portugal between 4 and 10 November, each marked as law, proposal or for information. The 2027 budget is still a bill: the article-by-article votes run on 18–20 November and the final vote is on 24 November.
4 Nov
IRS rate cut published: Decree-Law 212/2026 is in force In force
Decree-Law 212/2026 was published in the Diário da República on 4 November (Series I, No. 214) and entered into force on 5 November, with effect from 1 January 2026. It rewrites the general rate table in art. 68.º(1) CIRS: the first six brackets fall to 12.2%, 15.2%, 20.7%, 23.6%, 30.6% and 34.6%, while the bracket limits and the top three rates (43.1%, 44.6% and 48%) stay as they are. The table covers all income of resident individuals taxed at the general progressive rates – employment, self-employment and pensions, plus rents and investment income where the taxpayer opts to aggregate – so every resident saves on the slice of taxable income up to €43,090. No new withholding tables follow: November’s 50% withholding is the in-year adjustment, December returns to the normal tables, and the balance is settled in the 2026 return filed in 2027.
Who it affects: Resident employees, owner-managers on payroll and the self-employed. Income taxed at flat or special rates is outside the table: non-residents, IFICI holders on qualifying income taxed at 20%, and dividends, interest and rents taxed at 28% without aggregation.
5 Nov
Madeira cuts its regional IRS rates for 2026 In force
Regional Legislative Decree 17/2026/M, published on 5 November (Diário da República Series I, No. 215, and JORAM Series I, No. 201), amends DLR 3/2001/M so that Madeira’s rates stay 30% below the national table as cut by Decree-Law 212/2026. For 2026 the first six brackets fall to 8.54%, 10.64%, 14.49%, 16.52%, 21.42% and 24.22%; the upper three stay at 30.17%, 31.22% and 33.60%, and the bracket limits are the national ones. It applies from 1 January 2026.
Who it affects: Individuals resident in Madeira and Porto Santo, including managers and staff of companies licensed in the Madeira International Business Centre. Their November withholding is already halved under the regional Despacho 434/2026.
6 Nov
Budget 2027: a record 2,800-plus amendments, votes from 18 November Proposal
The amendment deadline closed on 6 November with more than 2,800 proposals, the most ever. For companies the ones to watch are on IRC: the PS, whose abstention carries the budget, wants to suspend the 2027 cut and keep the rate at 19%, using the roughly €300 million to cut fuel tax, a swap the Finance Minister rejected the same day; the PCP wants 21%; and PSD and CDS-PP, the governing parties, propose aligning the IRC benefits for residential letting with those in IRS. On property, the PS proposes higher IMT for non-residents, the IL the abolition of the AIMI surcharge, and Livre a temporary 7.5% IMT surcharge on property worth €1,150,853 or more. The article-by-article debate and votes, in plenary and in the Budget committee, run on 18, 19 and 20 November; the final overall vote is on 24 November.
Who it affects: All companies, and on the IMT and AIMI points, companies holding or buying Portuguese property. None of this is law; the IRC rate for 2027 turns on how the PS votes.
5 Nov
VAT: reverse charge on construction services reaches every buyer from 2027 Law, from 1 Jan 2027
Law 65/2026, published on 5 November, rewrites art. 2.º(1)(j) CIVA. For VAT that becomes chargeable from 1 January 2027, every VAT-registered buyer of construction services (building, refurbishment, repair, maintenance or demolition, under a works contract or subcontract) with a seat, permanent establishment or domicile in Portugal self-assesses the VAT – including businesses that make only exempt supplies, which today self-assess only on works at the reduced rate of item 2.42. The reverse charge still applies only where the contractor holds an IMPIC licence or certificate, and an exempt-only buyer pays the self-assessed VAT by the end of the following month without any right to deduct it. The same law widens the VAT regime for fuel resellers buying from operators not registered in the national petroleum system.
Who it affects: Companies that let residential property (an exempt activity), financial and insurance businesses, and developers commissioning works invoiced from January 2027. Companies with a full or partial right to deduct already self-assess and see no change.
6 Nov
AIMA opens online appointment requests for permanent residence For information
AIMA’s online contact form now has an option to request an appointment for a permanent residence permit under art. 80.º of Law 23/2007: choose “Autorização de Residência” and then “Pedido de Agendamento – Concessão de Autorização de Residência Permanente”. Applicants need five years on a temporary permit, means of subsistence and housing, basic Portuguese, no prison sentence over one year in the last five years and no debts to the tax authority or Social Security; the request attaches the current permit and proof of five years’ legal residence, such as earlier permits, the Social Security contribution record or IRS returns. Renewals of permanent permits, and EU registration certificates and family cards, stay on the AIMA renewals portal.
Who it affects: Non-EU founders and staff who have held temporary permits for five years. A clean tax and Social Security record is a condition, so the company’s payroll filings count. First permits and work routes are unchanged.
4 Nov
EU: Commission plans to withdraw BEFIT, the SME head-office tax and the late-payment regulation For information
In its 2027 work programme of 4 November the Commission lists 18 pending proposals it intends to withdraw within six months. Among them are BEFIT, the common corporate tax base for EU groups; the Head Office Tax, which would have let SMEs with branches in other Member States compute tax under their home-state rules; the 2018 digital-presence tax; the regulation on late payment in commercial transactions; and the recast directive on long-term resident non-EU nationals. The programme adds no new tax proposal: the direct-tax Omnibus of June 2026 stays on the priority list.
Who it affects: Groups with entities in several Member States. Nothing changes in Portugal: IRC, the domestic late-payment rules of Decree-Law 62/2013 and the residence rules stay as they are.
What to do this week
- December payroll goes back to the full withholding tables; there are no new tables for the lower rates. Tell staff that the rest of the 2026 cut, and any under-withholding from November, comes through the return they file in 2027. If you pay yourself through the company, our salary-or-dividends guide shows where the new rates bite.
- Commissioning building or refurbishment works that will be invoiced from January 2027? If your company lets residential property or makes only exempt supplies, plan to self-assess the VAT: check the contractor’s IMPIC licence, ask for invoices marked “IVA – autoliquidação” and diary payment for the end of the following month. Our property tax guide covers the rest of the cost of owning through a company.
- Keep planning on 19% IRC for 2026 and treat 18% for 2027 as a bill until 24 November. If you are choosing between a Portuguese subsidiary and a branch for next year, the rate is the same for both; the difference is liability, profit repatriation and filings.
- Before the year closes, check the company file: managers’ mandates, registered office, and the RCBE beneficial-owner declaration, which must be updated within 30 days of any change. Our corporate secretarial service keeps this current, and our memoranda give a written view on any point in this issue.
- Non-EU staff with five years on temporary permits can now request a permanent residence appointment online; permanent status ends the renewal cycle. For new non-EU hires, start with our guide to hiring non-EU staff.
Not sure which of these touches your company?
Send us your structure and we will tell you, in a paragraph, what this week means for you and what to do before which date.