Portugal

Tax System Overview

Portugal has standard European tax rates, but became a major hub due to its Non-Habitual Resident (NHR) program, which offered a decade of tax breaks for new residents. With the closure of the classic NHR, the landscape has shifted.

Corporate Taxation

The standard corporate tax rate in mainland Portugal is 21%, plus municipal and state surtaxes that can push the effective rate to roughly 31.5% for large profits.

However, companies established in the Madeira International Business Centre (MIBC) benefit from a reduced corporate tax rate of 5% on international profits, provided strict substance and job creation requirements are met.

The End of NHR

The classic NHR regime (20% flat tax on domestic income, exemptions on foreign income) closed at the end of 2023. The replacement regime is highly restricted, targeting only specific scientific research, academic, and highly qualified startup roles. For the average digital nomad or business owner, standard progressive rates (up to 48%) now apply.