Flash News NA 2025/02/20
Portugal - Municipal Tax Rates that apply to the taxable income subject to corporate income tax for the 2024 tax period
The municipal tax rates and exemptions that apply to the taxable income subject to corporate income tax for the 2024 fiscal period were published through Circular Letter No. 20273 of 01/22/2025.
The municipal tax applies to the taxable income subject to and not exempt from corporate income tax, with its rate set annually by each municipality in the Municipal Assembly and may reach a maximum value of 1.5%.
This tax is due in the municipality where the company has its registered office. However, if a company has establishments in several municipalities, the taxable income must be split to correctly apply and calculate the municipal tax corresponding to each municipality.
In addition to the normal tax rate of a maximum of 1.5%, each municipality can also set a reduced rate and even an exemption from the municipal tax, which will be applied if certain requirements defined by each municipality are met. Among the requirements usually established are, for example, the company's turnover, the creation and maintenance of a certain number of jobs and companies with certain CAEs (Economic Activity Classification Codes).
We explain below the different ways of applying the tax rates:
- Normal rate: applies when the company does not meet the specific requirements to benefit from the reduced rate or exemption eventually defined by the municipality;
- Reduced rate: applies to companies that meet the specific requirements defined by the municipality for this rate and do not meet the exemption requirements eventually defined by the municipality;
- Exemption: applies to companies that meet the specific requirements defined by the municipality;
The rates and requirements defined for each type of rate, as well as the exemptions defined by each municipality that apply to the taxable income subject to corporate income tax for the 2024 fiscal period can be consulted in the following link:
With the start of the submission period for the Corporate Income Tax Declaration (Model 22) for the year 2024, the deadline for which is May 31, 2025, this information becomes essential for companies to efficiently comply with said tax obligation.
In Nominaurea, you will find a team available to support your company in all the fundamental issues for the development of your business, always complying with all legal requirements.
