What is IRC?
IRC (Corporate Income Tax) is a direct tax levied on the income of legal entities that have their head office or effective management in Portuguese territory.
How do you declare this tax?
Your company is obliged annually to submit a declaration to the Tax and Customs Authority, in which your income and expenses are listed. The annual corporate income tax return is filed on Form 22 by May 31 (these deadlines have been extended) and always refers to the previous year.
What is the current IRC rate?
The IRC rate applies to the taxable base, which is determined through various calculations and the application of other rates.
This rate varies depending on the location of the company in the Portuguese territory, being different in Mainland Portugal and in the Autonomous Regions of Madeira and Azores, but also for SMEs (Small and Medium Enterprises).
So, for example, if your company is based in mainland Portugal and is not considered an SME, then the applicable corporate income tax rate is 21%. But if the company is classified as an SME in mainland Portugal the rate is 17% on the first 50,000€ of taxable income (tax year 2023) and 21% on the remaining taxable income.
It does not exempt you from consulting current legislation.