Benefits to apply when closing the 2024 accounts
Highlights
General Considerations
Incentive for Salary Appreciation
Tax Benefits Applicable to Inland Territories
Tax Regime to Encourage Business Capitalization (ICE)
Extraordinary Support Regime for Electricity and Gas Expenses
GENERAL CONSIDERATIONS
No benefit can be applied if, at the time of submitting Form 22, the company has outstanding debts related to the year 2024.
Even if the company has an accounting loss at the end of the year, applicable tax benefits should still be applied.
If the company has a negative accounting result, the Autonomous Taxation (AT) must be increased by 10 percentage points.
When closing the accounts, verify if the municipal tax rate corresponds to the municipality where the company operates. See this Official Circular: https://info.portaldasfinancas.gov.pt/pt/informacao_fiscal/legislacao/instrucoes_administrativas/Documents/Oficio_circulado_20273_2025.pdf
Check whether the company has tax losses from previous years that can be carried forward.
Validate the Special Advance Payments made and only consider the amounts that were actually paid.
INCENTIVE FOR SALARY APPRECIATION
Cannot be applied to managing partners or their relatives.
Employment contracts must be permanent or indefinite. This information can be checked through Social Security at:
Employment > Employee Records > Employment Contract Inquiry
The company must be covered by a Collective Labor Regulation Instrument . Go to the DGERT website (https://www.dgert.gov.pt/ferramenta-para-pesquisa-de-convencoes-coletivas#irct_form) and verify if there is an active collective bargaining agreement (CCT) associated with the company's CAE, district, and municipality.
Applicable only to salary increases above 5.1%.
Not applicable to increases in the minimum wage.
TAX BENEFITS APPLICABLE TO INLAND TERRITORIES
In certain inland regions, a benefit allows for a reduced Corporate Income Tax (IRC) rate on the first €50,000 of taxable income. Instead of the standard 17% rate, a 12.5% rate is applied to the first €50,000.
Any amount above €50,000 is taxed at the 21% standard rate.
The eligible regions in mainland Portugal are listed in Ordinance No. 208/2017 (https://files.diariodarepublica.pt/1s/2017/07/13400/0373103734.pdf).
In Madeira, eligible regions apply a rate of 8.75% to the first €50,000 (https://joram.madeira.gov.pt/joram/1serie/Ano%20de%202022/ISerie-163-2022-09-14sup.pdf).
In the Azores, all municipalities qualify, and the 8.75% rate applies.
TAX REGIME TO ENCOURAGE BUSINESS CAPITALIZATION (ICE)
The rate applied under this benefit is based on the 12-month Euribor average for the tax period (calculated using the last day of each month), plus a 2 percentage point spread, applied to the net increase in eligible equity.
For example:
Average Euribor rate (3.222%) + 2% = 5.222%
This value is calculated by summing the net increase in equity carried over from 2023 and from 2024, accounting for all capital reductions during these periods (as shown in the example table below):
In 2024, two ICE lines must be completed: one for 2023 results and one for 2024.
If the benefit was not applied in 2023, the 2023 line should be filled with zeros.
Apply the following increases to the calculated value:
50% for 2024
40% for 2025
30% for 2026
The total deductible amount must fall within one of the following limits:
a) €4,000,000; or
b) 30% of the EBITDA (earnings before interest, taxes, depreciation, and amortization), as per Article 67 of the IRC Code. Any deduction amount exceeding these limits can be carried forward for up to five subsequent tax years, following the rules stated above.
EXTRAORDINARY SUPPORT REGIME FOR ELECTRICITY AND GAS EXPENSES
This regime compares 2024 electricity and gas expenses with those from 2021.
A 20% increase (uplift) is applied to the difference between the two amounts.
If the company was established after 2021, this benefit does not apply.
Example:
Company X, Lda had electricity expenses of €20,000 in 2021.
In 2024, electricity expenses rose to €32,000.
Fiscal Adjustment in 2024:
Increase in electricity costs = €32,000 - €20,000 = €12,000
Uplift = €12,000 * 20% = €2,400 (Negative tax adjustment)