The rates
| Portugal | Denmark | |
|---|---|---|
| Corporate tax | 19 % in 2026, 18 % in 2027, 17 % from 2028 | 22 % |
| Small companies | 15 % on the first 50 000 € of taxable profit (EU SME definition, commercial, industrial or agricultural activity) | no reduced rate |
| Municipal surcharge (derrama) | up to 1,5 % of taxable profit, set by each council; many exempt small companies | — |
| State surcharge | 3 % on profit above 1,5 million, 5 % above 7,5 million, 9 % above 35 million | — |
| Effective rate, SME, 100 000 € profit | about 18,5 % (15 % on 50 000, 19 % on 50 000, 1,5 % derrama) | 22 % |
| Effective rate, 2 million € profit | about 20,6 % (19 % + 1,5 % + 3 % on the slice above 1,5 million) | 22 % |
| VAT | 23 / 13 / 6 % | 25 %, no reduced rate |
| Employer contributions | 23,75 % of salary, no ceiling | none of note (tax-financed); ATP a few hundred DKK a year |
Portugal’s rate advantage is real but modest for a large group (about 1,5 points in 2026, 3,5 from 2028) and clear for a small one. The payroll comparison runs the other way: Portuguese employer contributions of 23,75 % against practically none in Denmark, against salaries that are roughly half of Danish levels in most sectors.
- 19 % → 17 % Portuguese rate path; 22 % Danish rate, unchanged since 2016
- 15 % on the first 50 000 € for SMEs
- 10 % treaty withholding on dividends to a Danish parent — 0 % under the EU parent-subsidiary rules for a 10 % holding kept a year
- 23,75 % employer contributions on Portuguese payroll
Subsidiary or branch
- Subsidiary (Lda or SA): a Portuguese company, IRC on its own profit, dividends to the Danish parent free of withholding when the parent holds 10 % for a year (otherwise 10 % under the treaty); Danish participation exemption on receipt. Local contracts, hiring and financing are simpler.
- Branch (sucursal): a permanent establishment of the Danish company; IRC on the profit attributed to it at the same rates; no withholding on repatriation; Danish tax on the branch profit follows Denmark’s territorial rules, which generally exempt foreign permanent establishments. The treaty’s article 5 defines the establishment (a fixed place of business; a building site of more than twelve months; a dependent agent).
- No presence: sales into Portugal from Denmark create no IRC liability without a permanent establishment; VAT follows the one-stop-shop and reverse-charge rules.
Incentives a Danish investor can use
- RFAI: a tax credit of up to 30 % of qualifying investment in eligible regions, with IMT, IMI and stamp-duty exemptions on the investment property, tied to job creation.
- SIFIDE II: a credit of 32,5 % of R&D spend plus 50 % of the increase over the previous two years.
- Patent box: 85 % of income from patents and software copyright excluded.
- Contractual incentives for projects above 3 million euros, negotiated with AICEP.
- IFICI for the Danish staff you bring: 20 % personal tax for ten years on their Portuguese salary when the company qualifies (certified start-up, exporter with a listed CAE code, AICEP-recognised project).
Compliance calendar
Modelo 22 by 31 May, IES by 15 July, VAT returns monthly (turnover above 650 000 €) or quarterly by the 20th of the second month, payroll withholding and social security by the 20th of the following month, SAF-T invoicing files monthly, beneficial-owner register on incorporation and yearly confirmation, transfer-pricing file for related-party dealings with the Danish parent above the thresholds.
Steps
Structure
Subsidiary or branch, decided on the business plan and the financing; NIF for the Danish directors, NIPC for the entity.
Incorporation or registration
Lda online or at Empresa na Hora in a day; branch registered at the commercial registry with the parent's documents apostilled and translated.
Registrations
Activity and VAT at Finanças, Segurança Social, bank account, beneficial owners, certified accountant.
First year
Payroll, VAT, the first Modelo 22 the following May, RFAI or SIFIDE claims where the investment qualifies.
Access Portugal sets up the subsidiary or branch, registers it, runs the accounting, payroll and tax filings, and prepares the incentive claims — with your Danish group accountant kept in the loop. Ask for a set-up quote.
Questions
Is the 15 % SME rate available to a subsidiary of a Danish group?
Only if the group as a whole meets the EU SME definition (fewer than 250 staff, turnover up to 50 million or balance sheet up to 43 million); a small subsidiary of a large group is taxed at 19 %.
How are dividends to the Danish parent taxed?
Exempt from Portuguese withholding when the parent holds at least 10 % for a year (EU parent-subsidiary rules as implemented in the IRC Code); otherwise 10 % under the treaty. Denmark exempts dividends from a subsidiary under its participation rules.
Can Danish staff work from Portugal for the Danish company without a Portuguese entity?
Their presence can create a permanent establishment (the treaty's fixed-place and dependent-agent tests) and always creates Portuguese payroll obligations; an employer-of-record arrangement or a subsidiary avoids the uncertainty.
Sources and official references
- Lei n.º 64/2025 — IRC 19 % (2026), 18 % (2027), 17 % (2028); 15 % on the first 50 000 € for SMEs — checked 18.9.2026
- Código do IRC, artigo 87.º-A — state surcharge 3 / 5 / 9 %; artigo 120.º — Modelo 22 by 31 May; artigo 121.º — IES by 15 July — checked 18.9.2026
- Código do IVA, artigo 18.º — 6 / 13 / 23 %; artigo 41.º — monthly above 650 000 € of turnover — checked 18.9.2026
- Lei n.º 110/2009, artigo 53.º — employer contribution 23,75 % — checked 18.9.2026
- Skat — corporation tax 22 % of taxable profit — checked 18.9.2026
- Skat — VAT 25 % — checked 18.9.2026
- Convention Portugal–Denmark — art. 5 (permanent establishment), art. 7, art. 10 (dividends 10 %), art. 11–12 — checked 18.9.2026