Portugal

Portugal's Rankings
CategoryRankScore
Overall Rank3449.04
Corporate Taxes3541.21
Individual Taxes3146.01
Consumption Taxes3355.79
Property Taxes2061.05
Crossborder Taxes2866.02

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

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