The majority of business leaders, 60%, believe the Portuguese tax system is “complex and ineffective,” though a third acknowledge its effectiveness, as reported by Deloitte’s Fiscal Competitiveness Observatory 2025.
The study released today indicates that 93% of companies find the system complex, yet 33% consider it effective, marking a reversal of previous years’ pessimism. Despite this improvement from 2023 and 2024, perceptions remain “distant from the more favorable levels of 2019 to 2021.”
“National companies are convinced that the government’s fiscal policy could boost development and enhance the competitiveness of Portuguese businesses,” a statement notes.
Among respondents, 98% believe there is room to improve fiscal policies targeting families and businesses, with 68% highlighting the need to balance new measures with public account consolidation.
Conversely, 62% perceive the tax system as ineffective.
Geopolitical uncertainty is deemed the primary concern for Portuguese companies this year, while unemployment ranks last.
Business leaders identified the most significant measures as reducing the maximum nominal corporate tax rate to 20% and mitigating autonomous taxation rates in this year’s State Budget (OE2026), suggesting that revising VAT rules should be a priority for improvement.
Regarding the Young IRS initiative, 54% of respondents deemed the measure’s strengthening as “ineffective” in curbing the exodus of workers abroad, while 42% disagreed.
The area considered “most sensitive for attracting and/or retaining investment” was bureaucratic simplification, “maintaining its relative leadership from the previous year,” ahead of the effective functioning of courts, financial investment incentives, and labor legislation.
Labor legislation dropped in relative position among investment obstacles, returning to fourth place after rising to third last year, surpassed by contextual costs and bureaucracy.
Over two-thirds (68%) of companies applied for tax incentives in recent years, with nearly half (46%) seeking financial incentives. Notably, SIFIDE II (33%) and the Recovery and Resilience Plan (PRR) (13%) stood out.
The study was conducted in May this year, involving 197 companies, of which 50% are in the tertiary sector and 55% had a turnover exceeding 50 million euros. Over two-thirds (69%) have more than 100 employees, with 64% based in Lisbon and 26% in the north of the country.
