Portugal Business Tax Review

We present a comparative table with the various possibilities available to open your business in Portugal, since the best choice always depends on each specific case. By predicting your business's sales, purchase, cost and profit values, there will be an option that will surely be the most beneficial and appropriate for your project. If you need any help in interpreting the chart or in the previous analysis of your business, please send mail to info@intax.pt

		Individual Self-Employed		Company
		Simplified Regime	Organized Accounting	Simplified Regime	Organized Accounting
	Conditions	- Regime by default, if the option for organized accounting is not made;	- Option is made until March and is valid until a new change;	Income < 200.000€; Total Assets < 500.000€; No Audit Obligation; the capital is not detained + 20%, by entities who don't fulfill the above requirements, except risc capital entities; Adopt the SNC for microentities; Who haven't waived by option the application of this regime in the previous 3 years.	There is no minimum stay period, and you can opt for the simplified regime as long as you meet the conditions. - Option is made until February of the year that the new regime is intended.
		- Option is made until March and is valid until a new change;	- It is compulsory the change for this scheme if the limit is exceeded for 2 year consec. or more than 25% in one year;
		- There is no minimum stay period;
		- Limit:   Income < 200.000,00€ /year	- Llimit:   Income > 200.000,00€ /year;	- Option is made until February of the year that you want to change, as well as the renounce;
	IRS / IRC	Income Tax
	Taxable Profit	Coeficints applied: - Sales (and restoration) – 0,15	Net income	Coeficints applied: - Sales (and restoration) – 0,04	Net income
		- Services – 0,75		- Services – 0,75
		- Prop.Ind/Intelect Prop.– 0,95		- Prop.Ind/Intelect.Prop. – 0,95
		- Capital gains – 0,95		- Real State; Capital gains – 0,95
		(see other coeficients)		- Minimum Taxable Profit: 4.242,00€
				All these coeficients are reduced to 50% at 1ºyear and 25% at 2ºyear
	Tax Rate	IRS table (from 14,5% to 48%)	IRS Table (from 14,5% to 48%)	17% at/ 15.000€; 21% on/ remain profit	17% at/ 15.000€; 21% on/ remain profit
	Derrama	n/a	n/a	n/a	Aprox 1,5% dep.municipality
	Autonomous Tributations	n/a	Specified on CIRS	The specified on CIRC with some exceptions	All the specified on CIRC
	Advanced Payments (PPC)	3 payments on 20/Jul, 20/Sept and 20/Dec, of a total of 76,50% of the IRS tax paid in the penultimate year;	3 payments on 20/Jul, 20/Sept and 20/Dec, of a total of 76,50% of the IRS tax paid in the penultimate year;	3 payments in Jul, Sept and 15th Dec; Amount: 80% (95% if Income > 500.000€) of the tax paid previous year;	3 payments in Jul, Sept and 15th Dec; Amount: 80% (95% if Income > 500.000€) of the tax paid previous year;
	Special Advance Payments (PEC)	n/a	n/a	n/a	Payment in March, or 2 payments in Mar and Oct; Amount: 1% Income previous year – PPC previous year; Not applicable on the 2 first years;
	Estate Derrama Aditional Advance Payment	n/a	n/a	n/a	Only applicable to companies with Taxable Income > 1.500.000,00€, at progressive rates from 3% D.E. and 2,5% PAC; Same deadlines as PPC
	VAT
	Limits and framework	- Exempt if Income < 10.000,00€ /year	- Exempt if Income < 10.000,00€ /year	- Exempt if Income < 10.000,00€ /year	- Exempt if Income < 10.000,00€ /year
		- Quarterly if Income > 10.000,00€ /year	- Quarterly if Income < 650.000,00€ /year	- Quarterly if Income > 10.000,00€ /year	- Quarterly if Income < 650.000,00€ /year
			- Monthly if Income > 650.000,00€ /year or by option		- Monthly if Income > 650.000,00€ /year or by option
	SOCIAL SECURITY
	Contributions	According to table, being the minimum amount a monthly contribution of 124,09€	Minimum compulsory – monthly contribution = 186,13€	The company have to pay contributions for the employed workers, of 34,75% (company 23,75% and plus 11% retained from the worker). The company manager has to pay the minimum of 149,04€. The average employee minimum contribution is 201,55€.	The company have to pay contributions for the employed workers, of 34,75% (company 23,75% and plus 11% retained from the worker). The company manager has to pay the minimum of 149,04€. The average employee minimum contribution is 201,55€.
	Accounting
		Optional	Mandatory	Mandatory	Mandatory
	INTAX	from 60,00€ month	from 120,00€ month	from 120,00€ month	from 120,00€ month
	Registration
	Incorporation	AT (Tax Authority) Activity Start	AT (Tax Authority) Activity Start	Commercial registry office	Commercial registry office
		0,00 €	0,00 €	360,00€	360,00€
	Others factors
	Disadvantages	Greater difficulty in accessing credit, as a private individual, and sometimes interpreted as being an unstable situation, and more difficult to prove stable incomes to banks and credit institutions.		Companies generally have higher fines, by AT and ASAE and ACT for non-compliance with standards and regulations, in some cases 5 times higher than independent individuals.
		There is no separation between the business and personal assets, and any liability of the business falls directly on the owner, as in the case of liens or arrests that fall directly on all his assets.
	Benefits	Individuals generally have lower fines, by AT and ASAE and ACT for non-compliance with any rules and regulations.		Easier access to bank credit and on better conditions through a company. In addition, the managing partner have a salary slip, which demonstrates greater financial stability also on a personal level.
				Independence of the shareholders' personal assets, in relation to the situation of the company. Shareholders not taken into account in situations of liens or arrests. The responsibilities are exclusively of the company.