Knowledge

In fiscal terms, the draft State Budget Bill for 2026, presented by the Government today, comes as no great surprise.

In terms of personal income tax (IRS), there has been a slight reduction in general rates through an increase in the upper limit of most tax brackets, a measure that was anticipated. It is also worth noting that the IRS exemption for productivity bonuses, performance bonuses, profit sharing and balance sheet bonuses has been maintained, in line with what was provided for in the 2025 State Budget.

In terms of corporate income tax, the government is maintaining the significant reduction in certain autonomous tax rates and strengthening a set of tax benefits, particularly regarding incentives for wage increases. A new addition is the incentive for consolidating rural properties, whether contiguous or adjacent, regardless of their economic use.

The IMT (property transfer tax) will also change: the applicable rates and brackets for properties intended for permanent residence and housing will increase by around 2%. Another significant change is the abolition of the solidarity surcharge on the banking sector.

In the chapter on tax transparency measures, it should be noted that the Social Security Fund, the Civil Servants' Pension Fund and the Tax Authority will exchange information on income declared for income tax purposes, sales values and services provided by taxpayers.

To keep our clients properly informed from the outset and provide them with an initial critical analysis of the Proposal's tax implications, the TELLES Tax Team has prepared a guide highlighting the most relevant measures.

Please refer to the attached document, which contains further information on the subject (only available in Portuguese).