Portuguese sovereign debt yields rose at the two-, five- and 10-year maturities. The movement therefore covered short-, medium- and long-term benchmarks, signalling a broad increase in the yields demanded by the market.
This development did not occur in isolation. Spain, Greece and Italy recorded similar movements, pointing to a region-wide adjustment in southern European government debt markets.
Rates traded on the secondary market serve as an indicator of governments’ financing conditions and investor sentiment. Daily movements should, however, be interpreted within the broader context of expectations regarding inflation, monetary policy and economic growth.
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Alibaba has announced a new processor dedicated to artificial intelligence, which it describes as the most powerful developed in China. The company also says the chip delivers three times the performance of its predecessor.
The launch comes as US restrictions are encouraging the development of technological alternatives within China. The ability to produce components domestically has therefore become a central issue for the sector.
The announcement intensifies competition around the chips used in AI systems. The information released highlights Alibaba’s ambition, although it does not provide technical details that would allow the new component to be compared with solutions from other manufacturers.
Nvidia ended its second fiscal quarter with net profit of $59.688 billion, an increase of 126% compared with the same period of the previous year. The result is more than double the amount achieved one year earlier.
The scale of the increase reinforces the company’s position as one of the leading players in the technology sector. The figures also highlight the financial scale achieved by a company closely associated with the development of advanced processors and the expansion of artificial intelligence.
The performance will be closely watched by investors and businesses seeking to assess whether demand for computing capacity will continue. Beyond the result of a single quarter, the key issue will be the sustainability of growth in a market characterised by intense innovation and competition.
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Profits at China’s major industrial companies grew by 17.6% between January and July compared with the same period in 2025. The result shows a substantial increase in cumulative profitability across the industrial sector.
Despite the increase, the pace was slower than that recorded over the first half of the year as a whole. This slowdown suggests that performance remains positive but has lost some momentum as the year has progressed.
Industrial profit growth is monitored as an indicator of Chinese economic activity and companies’ ability to absorb costs and maintain margins. The next data releases will help determine whether the slowdown is temporary or reflects a more persistent trend.
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Euribor rates moved in different directions during the session: the six- and 12-month benchmarks fell compared with the previous day, while the three-month rate rose. This divergence confirms that the various maturities do not always react uniformly to market expectations.
Euribor is a key benchmark for many credit agreements, particularly variable-rate mortgages. As a result, movements in each maturity may affect repayments differently, depending on the benchmark and review date specified in the agreement.
A single daily change does not, on its own, determine the medium-term trend. To assess the impact on household expenses, it is important to consider the cumulative movement in rates and confirm the specific terms of each loan.
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The total amount of outstanding loans for house purchases reached €118.021 billion in July. Compared with the same period of the previous year, growth stood at 11%, the highest annual rate recorded since February 2003.
This development shows a marked acceleration in mortgage lending and once again places this segment at the centre of banking activity. The increase in the outstanding balance reflects the net effect of new lending, repayments and other movements in financial institutions’ portfolios.
For households, banks and property professionals, this indicator warrants close monitoring, as it helps to explain the dynamics of home purchase financing. Future developments will depend, among other factors, on access to credit, borrowing costs and demand in the housing market.
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Portugal needs more housing. This is now a virtually universal consensus. But for the supply to increase, investment is needed. And investment requires clear, predictable, and stable rules.
Unfortunately, this is not always the case. In recent years, urban rehabilitation has been encouraged through the application of a reduced VAT rate of 6% on certain projects. The measure made sense. It allowed for the recovery of dilapidated buildings, the revitalization of historical centers, and the economic viability of projects that would otherwise never move forward.
The problem arose later.
In several cases, the Federal Revenue Service has been questioning the application of this reduced rate. And when it does so, the consequence can be severe: projects that were invoiced with a 6% ICMS (State VAT) rate may now be taxed at 23%. The difference is enormous.
Even more worrying is the timing of these corrections. In some cases, they appear years after the completion of the works, when the properties have already been sold and the projects financially closed. This creates a risk that is difficult to manage.
Construction and real estate development are activities with relatively small margins and long investment cycles. When tax rules are no longer predictable, the impact is not just accounting-related. It’s economic.
Investors become more cautious. Projects stop moving forward. The real problem is not the tax rate itself, but fiscal uncertainty.
When a company makes investment decisions, it does so based on current legislation. If, years later, the interpretation of that legislation changes, the risk ceases to be business-related and becomes institutional.
And this is particularly serious. In a tax state governed by the rule of law, the rules must be clear and stable. The tax administration must apply the law, not reinterpret it retroactively to create new tax obligations that were not foreseeable at the time of the economic decision.
The power of the Internal Revenue Service is naturally important to ensure compliance with tax obligations. But this power also needs limits. When the actions of the tax authorities generate instability in the markets, the impact can far exceed revenue collection. It can stifle investment. It can reduce the housing supply. And, paradoxically, it can even decrease tax revenue in the long term.
Portugal faces a huge housing challenge today. Solving this problem requires collaboration between the public and private sectors.
But this collaboration only works if there is trust. Without fiscal predictability, investment shrinks. And when investment disappears, the capacity to increase the housing supply also disappears.
Therefore, perhaps it is time to rebalance the relationship between the State and taxpayers. Combating tax evasion is necessary. But guaranteeing legal certainty is equally essential.
A strong tax system is not just one that collects taxes. It is one in which the rules are clear and respected by everyone. Including the State itself.
The digitalization of the economy has changed almost everything. It has changed how we buy, how we invest, and how companies provide services. Today, a business can operate in dozens of countries without ever opening a physical office. All it takes is an online platform. All it takes is a server. Sometimes, all it takes is an app.
The problem is that tax systems remain stuck in an old logic. They were designed for factories, warehouses, and physical stores. For an economy that depended on geographical presence. Not for a digital and global world.
Often the debate focuses on a simple question: how to tax digital companies?
But perhaps the most important question is another.
How to make the economy competitive enough to attract these companies?
Much of the public discussion insists on the idea that large technology platforms pay little tax in the countries where they operate. In many cases this is true. They manage to structure their activity across multiple jurisdictions and end up paying taxes where the tax framework is most favorable.
The political reaction is usually immediate: creating new rules, new taxes, new collection mechanisms.
But this approach raises a dilemma.
In a digital world, capital and services move easily. Companies choose where to invest. They choose where to establish themselves. They choose where to declare part of their activity. If a country becomes excessively burdensome from a fiscal or bureaucratic point of view, the result can be simple: investment goes elsewhere.
Therefore, perhaps the real debate is not just fiscal.
It’s economic.
And strategic.
Portugal faces the same challenge as many European countries. You want to ensure fiscal fairness. You want to collect revenue. But at the same time, you need to create an environment that is attractive to technology companies, startups, and digital platforms.
If the focus is only on increasing taxation, there is a risk of driving away innovation and investment.
Another relevant point is related to the structure of the economy itself. Small and medium-sized Portuguese companies continue to bear a significant part of the tax burden. Many operate only in the domestic market. They do not have international structures. They lack the capacity for global tax planning.
Large digital companies operate differently. They operate in networks. They distribute activities across multiple countries. They use complex legal structures.
The result is a system that appears unequal.
But the solution may not lie solely in trying to tax multinationals more. It may lie in reducing obstacles and increasing competitiveness for everyone.
The digital economy has also brought new challenges, such as crypto-assets and data-driven business models. Portugal has already begun creating rules to tax some of these assets. Still, the market evolves much faster than the legislation.
Regulation is necessary.
But over-regulation can stifle innovation.
Perhaps it would be useful to change the starting point of the debate.
Instead of simply asking “how to tax the digital economy more,” perhaps we should ask:
– How to make Portugal a competitive hub for technology companies?
– How to simplify the tax system?
– How to encourage investment, talent, and innovation?
In a world without digital borders, countries compete with each other. They compete for companies. They compete for talent. They compete for investment.
Taxation is only one part of the equation.
A strong economy is not built solely through tax collection. It is built through productivity, innovation, and business competitiveness.
And in this field, there is still much work to be done.
The economic outlook for Portugal remains relatively positive compared to the rest of Europe. The most recent projections indicate that the Portuguese economy should continue to grow at a rate higher than the Eurozone average in the coming years.
For 2025, it is estimated that Portugal’s Gross Domestic Product (GDP) will grow by approximately 1.9%, potentially accelerating to 2.1% in 2026. During the same period, the Eurozone economy is expected to grow by only 1.2% in 2025 and 1.0% in 2026. The difference is not enormous, but it reveals some resilience of the national economy in a more fragile European context.
Part of this resilience comes from the labor market, which remains relatively solid. Employment has remained stable, and household incomes have benefited from some recent tax changes and pension updates. These factors help sustain domestic consumption.
But there’s more.
The disbursement of European funds could become one of the main drivers of economic activity over the next two years. As the current financial framework of the European Union nears its end (scheduled for 2027), an acceleration in the use of these resources is expected, especially in countries like Portugal, Spain, and Italy.
At the same time, the European economic environment remains challenging.
Despite inflation slowing, growth in the region remains weak. Some countries even show signs of economic stagnation. France and Italy are expected to grow by just over half a percentage point, while Germany is slowly recovering after a period of contraction.
Monetary policy is also entering a new phase.
With inflation approaching the 2% target, European central banks may only make one more interest rate cut before halting the current cycle of declines.
Even with lower interest rates, consumption may not react immediately. Household confidence remains low, and many choose to maintain high levels of savings.
Another factor of uncertainty arises in international trade. New trade tariffs imposed by the United States could penalize the European economy. It is estimated that the impact could reduce the GDP of the European Union by about 1% by 2026.
Portugal should also feel the effects, although more limited. Projections point to a potential reduction of about 0.7%, largely because the direct exposure of the Portuguese economy to the US market is relatively lower than that of other European countries.
Overall, the Portuguese scenario remains moderately positive.
But it is not guaranteed.
Maintaining consistent growth will increasingly depend on investment in productivity, innovation, and business competitiveness. Without these structural factors, the current economic stability may prove temporary.
Portugal has demonstrated adaptability. The challenge now is to transform this resilience into lasting growth.
Choosing the legal structure of your company is a far more strategic decision than many business owners imagine. At first glance, options such as Sole Trader, Single-Member Private Limited Company, Private Limited Company or Public Limited Company may seem like mere legal formalities. However, in practice, this choice can have a significant impact on the tax burden, the protection of personal assets and the business’s growth potential over the years.
Let us start with the Sole Trader. This is often the simplest and fastest solution to start an activity. Here, the business and the individual are one and the same: profits are taxed under Personal Income Tax and added to the individual’s other personal income. Although it is a cost-effective option with less bureaucracy, it presents an important risk – the business owner’s personal assets are fully exposed to the debts and liabilities of the business.
The Single-Member Private Limited Company is the legal structure chosen by many small and medium-sized enterprises in Portugal. Although it has only one shareholder, it already allows a separation between the personal and business spheres. Profits are taxed under Corporate Income Tax, with rules different from Personal Income Tax, and there is greater protection of personal assets. In addition, this structure offers more flexibility to grow, obtain financing, bring in new partners or prepare the company for an expansion phase.
The Public Limited Company is designed for larger companies or those with ambitions for significant growth. It is an appropriate structure when there is a need to attract investment, distribute capital among multiple shareholders or prepare for a future sale of the company. On the other hand, it involves higher legal, governance and reporting requirements, which translates into greater costs and administrative complexity.
One of the most frequent questions is: which of these options pays less tax? The correct answer is: it depends on the specific case. The level of current and future profits, the degree of risk the business owner is willing to assume and the objectives for the next 5 to 10 years are decisive factors. In the early stages, with low profits, a Sole Trader structure may be sufficient. As results increase, Personal Income Tax can become more burdensome than Corporate Income Tax, making a company more tax-efficient.
Before making a decision, the ideal approach is to carefully analyse the current situation and the future expectations of the business. Clarifying how much you earn today, how much you expect to earn in the coming years and what your personal risk tolerance is provides an excellent starting point. The support of a specialised accounting firm makes it possible to simulate different scenarios and choose the most suitable structure, avoiding mistakes that can cost many thousands of euros in the future.
Would you like to understand whether your company’s legal structure is truly the most efficient for your situation? At our accounting firm, we help business owners make informed decisions, with clear tax simulations and personalised advice. Get in touch with us and book a meeting – you may be paying more tax than necessary.
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