The 2024 State Budget (OE2024) has brought about significant changes to the Incentive for the Capitalization of Companies (ICE) regime.
Previously, until 2024, a fixed rate of either 4.5% or 5% was applied to the net increase in eligible equity, which could be deducted from the taxable profit of commercial companies.
However, with the enactment of the 2024 OE, the calculation of increases in equity eligible for deduction from taxable profits is now determined by the 12-month Euribor rate, representing the average rate for the relevant tax period, plus a spread of 1.5%, or 2% f or SMEs or Small Mid-Caps.
Nevertheless, the OE2024 has restricted the total net increases in eligible equity, previously encompassing those from the tax period in question and the preceding 9 tax periods, to now only consider increases made in the last 6 years.
Furthermore, the maximum deduction limits have been raised to 4 million euros (previously 2 million euros), or 30% of the company’s profit before depreciation, amortization, and financing costs.
Any deduction exceeding these limits can still be carried forward to subsequent years.
Tax Department
Sofia Quental | Inês Grácio | Flávia Almeida | Catarina Amaral
