Portugal Private limited company (Lda) tax calculator 2026
A Portuguese Lda pays corporate income tax (IRC) at a general rate of 20%, with a reduced SME rate of 16% on the first €50,000 of taxable profit (scheduled to fall to 15% for 2026). Distributed dividends face a 28% withholding. Municipal and state derrama surcharges are additional.
This calculator estimates the corporate income tax (IRC) a Portuguese private limited company (Lda) owes on its taxable profit for 2026, plus the withholding tax due when profits are paid out as dividends.
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Result
Portugal Private limited company (Lda) tax rates 2026
| Band or item | Rate |
|---|---|
| Corporate tax: Up to €50,000 | 16% |
| Corporate tax: Over €50,000 | 20% |
| Dividend tax (on distribution) | 28% |
Source: taxsummaries.pwc.com
How is IRC calculated for a Portuguese Lda?
A private limited company (sociedade por quotas, or Lda) is taxed on its worldwide taxable profit under the corporate income tax regime known as IRC. Taxable profit is the accounting result adjusted for non-deductible costs and tax-exempt income.
The general IRC rate is 20%. Companies that qualify as small or medium-sized enterprises benefit from a reduced rate of 16% on the first €50,000 of taxable profit, with the balance taxed at the general 20% rate. This reduced SME rate is scheduled to drop to 15% for 2026. The rate is applied progressively: only profit above the €50,000 threshold is charged at 20%.
Note that this estimate covers the state IRC only. Most municipalities levy an additional derrama municipal of up to 1.5% on taxable profit, and a progressive derrama estadual applies to larger profits. Those surcharges are not included here.
Dividends and distribution tax
IRC is charged at the company level. When the Lda distributes its after-tax profit to shareholders, a separate 28% withholding tax applies to the dividends paid to resident individuals. This is why profits extracted as dividends are effectively taxed twice: once inside the company through IRC, and again on distribution.
Shareholders who are companies may qualify for the participation exemption, and non-residents may benefit from a lower rate under a tax treaty, but the standard domestic withholding on a dividend is 28%.
Worked example: €80,000 of profit
Suppose an Lda that qualifies as an SME reports €80,000 of taxable profit in 2026.
- First €50,000 taxed at 16% = €8,000
- Remaining €30,000 taxed at 20% = €6,000
- Total IRC = €14,000 (an effective rate of 17.5%)
That leaves €66,000 of after-tax profit. If the company then distributes €30,000 as a dividend to a resident individual shareholder, a 28% withholding applies:
- Dividend withholding = €30,000 × 28% = €8,400
The shareholder receives €21,600 net from that distribution. Remember that municipal and state derrama surcharges would add to the €14,000 IRC figure in most locations.
Frequently asked questions
What is the corporate tax rate for a Portuguese Lda?
The general IRC rate is 20%. Qualifying SMEs pay a reduced 16% on their first €50,000 of taxable profit (scheduled to fall to 15% for 2026), with profit above that taxed at 20%.
How much tax does an Lda pay on €50,000 of profit?
An SME-qualifying Lda pays the reduced 16% rate on the first €50,000, giving €8,000 of IRC (before any municipal or state derrama surcharge).
How are dividends from a Portuguese company taxed?
Dividends paid to a resident individual are subject to a 28% withholding tax. On a €10,000 dividend that is €2,800, leaving €7,200 net.
Does the reduced 16% rate apply to all companies?
No. The reduced 16% rate on the first €50,000 applies only to companies that qualify as small or medium-sized enterprises. Other companies pay the general 20% rate on all taxable profit.
Are municipal surcharges included in the IRC rate?
No. The 20% IRC rate excludes the derrama municipal (up to 1.5% on taxable profit) and the progressive derrama estadual that applies to larger profits, which are charged on top.
What is the total tax on profit that is paid out as a dividend?
Profit is taxed first by IRC (16% or 20%) at the company level, then the dividend faces a 28% withholding. For example, €100 of SME profit taxed at 16% leaves €84, and distributing it costs a further €23.52, leaving €60.48 net.
Official sources
- Autoridade Tributária e Aduaneira (AT) — Corporate & personal income tax