2027 according to the State Budget

Following the submission of the 2027 State Budget proposal, we highlight the key points relevant to companies, as well as other provisions expected to remain in effect under existing legislation.

Corporate Income Tax (IRC)

• General Rates

The general tax rate is reduced to 18% (down from 19%), following the reduction already stipulated in the 2026 State Budget Law.

The 15% tax rate for small and medium-sized enterprises (SMEs) is maintained for the first €50,000 of the taxable base.

• Autonomous Taxation Rates

The provision preventing an increase in autonomous taxation rates due to tax losses is maintained, provided that the taxpayer has generated an actual profit in one of the three preceding tax periods and has complied with the filing obligations set forth in Articles 120 and 121 of the Corporate Income Tax (IRC) Code for the two preceding tax periods.

Extension of Tax Obligations

• The requirement to submit the accounting SAF-T PT file

 Is deferred to the 2028 reporting period (previously 2027), with submission due in 2029.

• The mandatory issuance of electronic invoices

Is deferred to 2028; for the 2027 fiscal year, invoices may continue to be sent in PDF format. Furthermore, micro, small, and medium-sized enterprises are exempt from the electronic invoicing requirement in the context of public procurement (tendering) processes.

• Valued inventory

Taxpayers are exempt from the requirement for tax periods beginning on or after January 1, 2026. This exemption also applies to taxpayers not required to maintain perpetual inventory records for tax periods beginning on or after January 1, 2027.

VAT (IVA)

• Remains in effect for 2027

Exemption on the sale of animal feed products to duly recognized animal welfare associations.

• Proposed to be maintained until December 31, 2027

Exemption, for the transfer of certain goods typically used in agricultural and livestock production activities.

Tax Benefits

• System of Tax Incentives for Business R&D (SIFIDE)

Extended to tax periods beginning on or before December 31, 2027.

• Professional Development Incentive Regime:

A 200% deduction from taxable profit is permitted for costs associated with salary increases for employees with permanent (indefinite-term) employment contracts, provided that:

The average annual base salary increase within the company—measured against the end of the previous year—is at least 4.5% (previously 4.6%);

and

The annual base salary increase for employees earning an amount equal to or less than the company’s average annual base salary at the end of the previous year is at least 4.5% (previously 4.6%).

The maximum amount of eligible costs per employee is capped at 5 times the minimum wage.

Productivity bonuses, performance-based pay, profit-sharing, and year-end bonuses: Exemption from income tax (IR) and the Unified Social Contribution (TSU) applies to non-recurring productivity bonuses, provided they do not exceed 6% of the employee's annual base salary. The application of this regime requires employers to increase employees' fixed remuneration in 2027 by at least 4.5% (previously 4.6%) relative to the average annual base per employee compared to the previous year.

Tax on Alcoholic Beverages (IABA)

• Rate reduction

The reduction of the IABA rate—set at 25% of the tax—is extended until December 31, 2027. This applies to liqueurs, "crème de" spirits, distilled spirits, and *medronho* (strawberry tree fruit) brandy—in accordance with the provisions of Annex II to Regulation (EC) No 110/2008 of the European Parliament and of the Council of January 15, 2008—provided that they are manufactured exclusively from the fruit of the strawberry tree (*Arbutus unedo*) and are produced and distilled in the municipalities specified in current legislation.

Municipal Property Transfer Tax (IMT)

• Tax relief

On the acquisition of an urban building or an autonomous unit within an urban building intended exclusively for residential use, up to a value of €108,792 (previously €106,346).

A 2.3% adjustment

• To the tax brackets used to determine the IMT rate applicable to the transfer of urban buildings, or autonomous units within urban buildings, intended exclusively for residential use.

Financial Contributions

Extension of the following levies:

• Extraordinary Contribution on the Pharmaceutical Industry (CEIF);
• Contribution on the banking sector;
• Extraordinary Contribution on suppliers to the medical device industry for the NHS (National Health Service);
• Extraordinary Contribution on the Energy Sector (CESE), excluding the portion levied on concessionaires engaged in the transport, distribution, or underground storage of natural gas.

Salaries

• Proposed minimum wage for 2027

 €970 per month (previously € 920).

This information is intended to provide a brief summary of the points we consider most relevant for companies in general for the year 2027. It is not definitive information and does not replace the need to consult with qualified professionals at CSCC; please reach out to us through our usual communication channels.