IRC
Imposto sobre o Rendimento das Pessoas Coletivas · Corporate Income Tax
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Portugal's corporate income tax on company profits, with a standard rate and reduced rates for qualifying SMEs and certified startups on the first €50k of taxable income. The IRC simplified regime can bring the effective rate down significantly for service companies.
IRC is the tax companies pay on their profits. If you operate as a sole proprietor, you pay IRS instead. The distinction matters because the rates and rules are fundamentally different.
Rates (2026)
| Scenario | Rate |
|---|---|
| SME (PME), first 50 000 € | 15% |
| Startup (Estatuto de Startup), same first band | 12,5% |
| Standard | 19% |
A municipal surcharge (derrama) of 0 to 1,5% may also apply.
The simplified regime
Companies within the regime's own limits (gross income up to 200 000 € and a balance sheet up to 500 000 € in the previous year, using the micro-entity accounting standard, among other conditions) can opt into the IRC simplified regime, which applies coefficients to revenue instead of tracking actual expenses:
- General services: 10% of revenue is taxable → ~1.5% effective rate. Not for the professions on the Art. 151 CIRS list, which are taxed on 75% of revenue.
- Goods sales: 4% of revenue is taxable → ~0.6% effective rate
See the full rate table.
IRC vs IRS for freelancers
The same €40,000 in consulting revenue results in very different tax (2026 rates, a full year of Social Security, not the first year of activity, no IRS Jovem):
- As sole proprietor (IRS): 75% taxable, less the Social Security above 10% of revenue (Art. 31 n.º 2 CIRS) → roughly €5,600 to €6,100 in income tax, depending on how much of the 15% expense proof your documented expenses cover, before personal deductions
- As Lda (IRC simplified): consulting is an Art. 151 activity, so 75% of revenue is taxable → ~€4,500 in corporate tax at the 15% PME rate
But the company has additional costs: contabilista certificado, IES filing, Social Security as sócio-gerente, and profit extraction taxes (salary or dividends). The total tax picture depends on how you extract money from the company.
See the full comparison for details.
Perguntas frequentes
What is IRC?
IRC stands for Imposto sobre o Rendimento das Pessoas Coletivas, Portugal's corporate income tax. It applies to companies (Lda, SA, etc.), not individuals. The standard rate is 19%, with reductions to 18% in 2027 and 17% in 2028.
What is the IRC simplified regime?
Companies within the regime's limits (gross income ≤ 200 000 €, balance sheet ≤ 500 000 € in the previous tax period) can opt into the IRC simplified regime. Instead of deducting actual expenses, a coefficient is applied to revenue. For general services, only 10% of revenue is taxable, resulting in an effective tax rate of approximately 1.5%. That coefficient is not for the professions on the Art. 151 CIRS list, which are taxed on 75% of revenue.
How is IRC different from IRS?
IRS is personal income tax (for individuals, including sole proprietors). IRC is corporate income tax (for companies). A sole proprietor pays IRS on business income. A company pays IRC. The rates and rules are completely different, which is why many founders switch from sole proprietor to Lda at higher revenue levels.
Termos relacionados
Portugal's personal income tax: the annual tax that solo entrepreneurs pay on their individual income, declared each spring for the previous year's earnings.
Contabilista CertificadoCertified AccountantA certified accountant registered with the Ordem dos Contabilistas Certificados (OCC). Required by law for companies and for sole proprietors on the normal regime, but not for the simplified regime.
IESInformação Empresarial Simplificada · Simplified Business InformationAn annual filing obligation for Portuguese companies (Lda, SA) combining accounting, tax, and statistical reporting into one electronic submission. Due by July 15 of the following year.