Law no. 73-A/2025, which approved The State Budget for 2026, entered into force on January 1, 2026.

Breaking with recent practice, changes to the various tax codes are limited.

Among the approved measures, we highlight the 3.5% update of the taxable income brackets for Personal Income Tax (PIT), and the slight reduction of the rates applicable to different brackets. The 48% rate now applies to taxable income above €86,634.

Still within PIT, an exemption is maintained, up to the limit of 6% of the employee’s annual base remuneration, for amounts received by employees or members of statutory bodies, borne by the employer, on a voluntary and non-regular basis, as productivity or performance bonuses, profit-sharing and year-end gratuities. The requirements on which this exemption depends remain unchanged. These amounts are excluded from the basis for social security contributions.

In the context of Corporate Income Tax(CIT), it is noteworthy that, as regards social utility expenses, costs incurred in the tax period with compensations due to employees for additional expenses arising from the provision of work while working remotely are now considered at 110% of their amount, within the limits set by law.

Also relevant for businesses, the eligibility criteria for the wage valorisation tax incentive provided for in the Tax Benefits Code have been amended: the deduction for salary increases now depends, in addition to other legal requirements, on at least a 4.6% rise (4.7% in 2025) in the company’s average annual base pay and in the annual base pay of employees earning at or below the company’s average at the end of the prior year.

Consistent with recent years, it was further established that, in 2026, autonomous taxation rates will not be increased by 10% in the event of a tax loss, if the taxpayer has obtained taxable profit in one of the three previous tax periods and if the filing obligations for Corporate Income Tax Form 22 and the Simplified Corporate Information (IES) for the two previous tax periods (2024 and 2025) were fulfilled within the legal deadline. This increase will also not apply if the 2026 tax period corresponds to the start of activity or one of the two subsequent periods.

On tax compliance:

• The requirement to value inventories, for the purposes of the communication provided for in Article 3-A of Decree-Law no. 198/2012, of August 24, is waived for:

a) All taxpayers, for tax periods beginning on or after January 1, 2026;

b) Taxpayers not required to maintain a perpetual inventory system, for tax periods beginning on or after January 1, 2026.

• Submission of the SAF-T (PT) accounting file under Ordinance no. 31/2019 of January 24, will apply to 2027 and subsequent periods, to be filed in 2028 or later.

• Until December 31, 2026, PDF invoices will be accepted and treated as electronic invoices for all purposes under tax law.

  
  

Finally, the State Budget Law extends for 2026 the sectoral contributions on banking and pharmaceuticals, the extraordinary levy on National Health Service suppliers of medical devices, the extraordinary levy on the energy sector, and the additional circulation tax.