Portugal
| Category | Rank | Score |
|---|---|---|
| Overall Rank | 34 | 49.04 |
| Corporate Taxes | 35 | 41.21 |
| Individual Taxes | 31 | 46.01 |
| Consumption Taxes | 33 | 55.79 |
| Property Taxes | 20 | 61.05 |
| Crossborder Taxes | 28 | 66.02 |
Portugal ranks 34th overall on the 2021 International Tax Competitiveness Index, the same as in 2020.
Strengths
- Corporations can deduct their property taxes from their taxable income, and there is an allowance for corporate equity (ACE).
- Portugal has a territorial tax system, exempting foreign dividend and capital gains income for most countries.
- Portugal provides above-average capital cost write-offs for investments in machinery.
Weaknesses
- Portugal has a high corporate tax rate of 31.5 percent (the OECD average is 22.9 percent).
- Companies are severely limited in the amount of net operating losses they can use to offset future profits and are unable to use losses to reduce past taxable income.
- The VAT at a rate of 23 percent applies to just half of the potential consumption tax base.
Learn more about the tax system in Portugal