The rates
| Portugal | Ireland | |
|---|---|---|
| Trading profit | 19 % in 2026, 18 % in 2027, 17 % from 2028 | 12,5 % |
| Small companies | 15 % on the first 50 000 € (EU SME definition) | no small-company rate; the 12,5 % applies from the first euro |
| Passive income (rents, interest, non-trading) | same rates | 25 % |
| Large groups | state surcharge 3 % above 1,5 million of profit, 5 % above 7,5 million, 9 % above 35 million | 15 % minimum for groups with global turnover above 750 million (Pillar Two) |
| Local tax | municipal surcharge (derrama) up to 1,5 % | — |
| Undistributed profits | — | close-company surcharge of 20 % on undistributed investment income and 15 % on half of undistributed professional-service income |
| Effective rate, SME profit 100 000 € | 15 % on 50 000 + 19 % on 50 000 + derrama ≈ 18,5 % | 12,5 % (trading) |
Ireland is cheaper at the company level for any trading business, by five to six points in 2026 and four to five from 2028. The gap closes at the shareholder level.
- 19 % → 17 % Portugal 2026–2028; 12,5 % Ireland on trading income, 25 % on passive
- 28 % vs marginal rate on dividends to the owner: Portugal's flat 28 %, Ireland's up to 40 % + USC + PRSI
- 28 % vs 33 % on the sale of the company's shares
- 23,75 % vs 11,25 % employer social contributions
The shareholder’s tax
| Portugal | Ireland | |
|---|---|---|
| Dividends to a resident individual | 28 % flat (final) | taxed as income at 20 % / 40 % plus USC and PRSI — up to 52 % for a higher-rate taxpayer |
| Dividends across the border | Portuguese 28 % cut to 15 % by treaty for an Irish resident; Irish dividend withholding of 25 % waived under Irish law for a Portuguese resident who files the exemption declaration | — |
| Sale of the shares | 28 % (less 10 / 20 / 30 % after 2, 5, 8 years for listed shares; 50 % of the gain for micro and small companies) | 33 % after 1 270 €; entrepreneur relief 10 % on the first 1 million of qualifying gains; retirement relief |
| Owner’s salary | 12,5 % to 48 % + 11 % employee contributions; 23,75 % employer | 20 % / 40 % + USC + 4,2 % PRSI; 11,25 % employer |
A Portuguese SME making 100 000 € and distributing all of it leaves its owner about 58 700 € after IRC, derrama and the 28 %; an Irish company paying 12,5 % and distributing to a higher-rate owner leaves about 42 000 € — Portugal’s flat dividend rate outweighs Ireland’s low corporate rate for an owner-manager who takes the profit out. Reinvested profit favours Ireland.
Other differences a founder notices
- R&D and IP. Ireland: R&D credit of 35 % (from 2026 Budget: 35 % on qualifying spend), knowledge development box at 10 %. Portugal: SIFIDE credit of 32,5 % of R&D spend plus 50 % of the increase, patent box excluding 85 % of qualifying income, RFAI investment credit.
- Losses. Ireland: carried forward indefinitely against the same trade. Portugal: indefinitely since 2023, limited to 65 % of each year’s profit.
- Substance. A company managed and controlled from Ireland is Irish-resident; a company incorporated in Portugal is Portuguese-resident unless its effective management is elsewhere; the treaty’s tie-breaker looks at effective management. A director living in Lisbon, boards held here and a Portuguese accountant keep the company Portuguese.
- Payroll. Employer contributions 23,75 % against 11,25 %; salaries in technology and services roughly half of Dublin levels; minimum wage 920 € a month.
- VAT. 23 / 13 / 6 % in Portugal; 23 / 13,5 / 9 / 4,8 % in Ireland — the standard rates match.
- Compliance. Portugal: Modelo 22 by 31 May, IES by 15 July, monthly or quarterly VAT, monthly payroll withholding, certified invoicing with SAF-T. Ireland: CT1 within nine months of year end, annual return to the CRO, bi-monthly VAT.
Setting up in Portugal
NIF and NIPC
Founder's tax number through a representative if abroad; company number at incorporation.
Incorporation
Empresa na Hora or online, capital from 1 €, registered office, certified accountant appointed from day one.
Registrations
Start of activity at Finanças (VAT regime), Segurança Social for the company and the director, beneficial-owner register, bank account.
Running it
Monthly payroll, VAT returns, the Modelo 22 in May; dividends after the accounts are approved.
Access Portugal incorporates the company, keeps the books and files IRC, VAT and payroll, with the director's personal return and the treaty forms handled by the same team. Ask for a set-up quote.
Questions
Can I keep my Irish limited company and live in Portugal?
You can, but if you are its only director and run it from Lisbon, its effective management moves with you and Portugal will treat it as Portuguese-resident (the treaty tie-breaker points to effective management). Either appoint Irish management and hold boards in Ireland, or accept Portuguese residence for the company and register it here.
Does Portugal have a 12,5 % equivalent?
No general one. The 15 % SME band on the first 50 000 € is the closest; Madeira's International Business Centre offers 5 % to licensed companies with local jobs, which suits few small businesses.
How are Irish dividends taxed if I move to Portugal?
Ireland waives its 25 % dividend withholding for residents of treaty countries who file the non-resident declaration; Portugal taxes the dividend at 28 %. If withholding was applied, the treaty caps it at 15 % and Portugal credits that amount.
Sources and official references
- Revenue — Corporation Tax basis of charge: 12,5 % on trading income, 25 % on non-trading income — checked 18.9.2026
- Revenue — current VAT rates from 1 January 2026: 23 %, 13,5 %, 9 %, 4,8 % — checked 18.9.2026
- Revenue — Capital Gains Tax 33 % — checked 18.9.2026
- Department of Social Protection — PRSI 2026: employee 4,20 %, employer 11,25 % — checked 18.9.2026
- 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 — checked 18.9.2026
- Revenue — Ireland–Portugal treaty: dividends 15 %, interest 15 %, royalties 10 %; Irish dividends to treaty residents exempt from withholding under domestic law — checked 18.9.2026