The State Budget for 2026 introduces a set of relevant tax measures with a direct impact on the taxation of individuals and companies.
The Budget follows a logic of continuity and selective adjustment, without introducing profound structural changes to the tax system, prioritising stability, predictability and fiscal consolidation.
Below is a summary of the main tax measures approved.
Personal Income Tax (IRS)
- Reduction of 0.3% in marginal tax rates applicable to the 2nd to 5th income brackets.
- Update of IRS brackets by approximately 3.5%, in line with inflation.
- Increase of the minimum subsistence threshold to €12,880, aligned with the 2026 minimum wage.
Corporate Income Tax (IRC)
- Reduction of the standard corporate tax rate to 19%.
- SMEs and Small Mid Caps: application of a 15% tax rate on the first €50,000 of taxable profit.
- Maintenance of the main tax incentives for investment and corporate capitalization.
VAT
- Introduction of a VAT grouping regime, allowing companies within the same group to be treated as a single VAT taxable person, enabling internal offsetting of VAT positions and simplification of VAT management.
- Extension of the reduced VAT rate (6%) to specific transactions, including certain activities in the cultural and agri-food sectors.
Other relevant measures
- Postponement to 2027 of certain digital tax obligations (including SAF-T and qualified electronic invoicing), with PDF invoices remaining acceptable throughout 2026.
The State Budget for 2026 thus reflects a clear choice in favour of tax stability, predictability and prudence, avoiding abrupt changes to the tax framework and favouring gradual adjustments.
Valadas Coriel & Associados will continue to monitor the practical implementation of the approved tax measures and is available to assess their impact in light of each client’s profile and corporate structure.
Tax Department
João Valadas Coriel | Sofia Quental | Inês Grácio | Catarina Amaral
