IRC reduction to 19% in 2026 approved in specialty

Parliament approved this Wednesday, in its specialty, the Government's bill to reduce the corporate income tax rate to 19% in 2026. The proposal also foresees that taxation will continue to decrease in the following two years, until reaching 17% in 2028.

In a vote by the Budget, Finance, and Public Administration Committee (COFAP), the reduction in general taxes was approved with the votes of the PSD, CDS-PP, and Chega parties. The PS voted against.

In the diploma, the Government proposes to Parliament to reduce the general IRC rate over the next three years, until it reaches 17% in 2028, foreseeing a drop in the rate from the current 20% to 19% next year, to 18% in 2027 and to 17% from 2028 onwards.

In addition to the reduction in the general rate, a reduction in the rate that applies to the first slice of profits of small or medium-sized enterprises (SMEs) and small mid-cap companies was also approved in the specialty, to 15% from 2026.

Currently, the rate that applies to the first €50,000 of SMEs' taxable income is already lower than the general corporate income tax rate, at 16%.

The SME tax reduction was voted on separately at the request of the Socialist Party parliamentary group. The Socialist Party abstained from voting on this reduction. The PSD, CDS-PP, and Chega parties voted in favor of the reduction.