Published by Global Banking & Finance Review®
Posted on July 17, 2025
2 min readLast updated: January 22, 2026
Add as preferred source on GooglePortugal plans to cut its corporate tax rate to 17% by 2028 to boost competitiveness and investment, with expected parliamentary support.
LISBON (Reuters) -Portugal's minority government will present a bill that would gradually cut the corporate tax rate to 17% by 2028 from 20% now, aiming to improve business competitiveness and boost investment, Prime Minister Luis Montenegro said on Thursday.
In keeping with the centre-right ruling coalition's electoral promise and following a one-percentage-point cut this year approved by the previous legislature, the bill would trim one percentage point off the tax rate in each year between 2026 and 2028.
The cabinet should approve the bill on Friday, Montenegro said.
"This opens a new cycle of tax attractiveness for Portugal ... to strengthen investment with incentives for our entrepreneurs," Montenegro told lawmakers, adding that it would also improve workers' conditions.
Business owners have long complained about stifling corporate tax rates, which reach more than 30% when state and municipal taxes are added, representing the second-highest rate in the European Union, according to international think-tank Tax Foundation.
The bill is likely to be approved by parliament later with support from the far-right Chega party, which has advocated a substantial tax cut for companies. Chega became the main opposition party after a parliamentary election in May that gave Montenegro's Democratic Alliance a new term.
(Reporting by Sergio Goncalves; editing by Andrei Khalip)
Corporate tax is a tax imposed on the income or profit of corporations. It is typically calculated as a percentage of the company's taxable income.
Business investment refers to the allocation of resources, usually financial, to acquire assets or improve operations with the expectation of generating returns.
Economic growth is the increase in the production of goods and services in an economy over a period, often measured as the percentage increase in real GDP.
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