On 23 October 2026, Finance Minister Joaquim Miranda Sarmento confirmed that the government will shortly approve the remaining reduction in autonomous taxation (tributações autónomas) rates for corporate vehicles and expenses. The measure completes a phased reduction begun in 2023, lowering the maximum rate on light passenger vehicles from 35% to 25% and on representation expenses from 50% to 35%. The change addresses long-standing business complaints about the punitive nature of these presumptive taxes, which are levied irrespective of profitability. The decree-law is expected to be published in November 2026, with effect from 1 January 2027.
Key Takeaways
- Rate Reductions: Vehicle rates drop by 10 percentage points; representation expenses by 15 points, aligning Portugal closer to EU averages.
- Revenue Neutrality: Government asserts the cut will be offset by broader corporate tax base expansion and anti-evasion measures.
- Compliance Simplification: Lower rates reduce the incentive for companies to reclassify expenses to avoid autonomous taxation.
Disclaimer: This article is compiled and summarized by the AI based on publicly available information and is for general information purposes only. It does not constitute any form of formal tax advice, legal opinion, or basis for performance. Please consult a qualified professional tax advisor or legal counsel for tax advice.
Source: Read Official Announcement