Portugal is one of eight countries where the effective tax rate is reduced due to companies’ equity provisions, alongside Belgium, Cyprus, Italy, Liechtenstein, Malta, Poland and Turkey. In addition, the country shares one of the lowest marginal effective tax rates with Cyprus, Italy, Liechtenstein, Malta, Poland and Turkey.
On the other hand, Portugal is listed as the eighth country where companies face higher taxes initially, before any tax incentives. However, despite this, revenue from corporate taxes in Portugal has a relatively modest impact on total revenue, representing less than 10 per cent and below the OECD average.
The OECD also notes that the cost of capital for research and development (R&D) in 2022 was lowest in Portugal, Poland and France, although these countries offer more generous tax incentives to stimulate investment in R&D.