Data from Jornal Económico indicate that the interest rates offered by Portuguese banks for term deposits are decreasing faster than the ECB’s rate cuts.
On average, the one-year remuneration was **1.605%**, compared to a Euribor of 2.525% in January.
This divergence affects the attractiveness of term deposits and leads depositors to reconsider investment alternatives, reflecting the tension between banks and the ECB in monetary policy.
The Public Finance Council (CFP) updated its projections and predicts that, after a balanced budget in 2025, the country could return to a deficit of around 1% of GDP in 2026, due to ongoing spending and commitments made throughout the legislature.
The CFP emphasizes that these projections do not yet consider the effects of meeting NATO targets or possible new external tariffs, such as those from the US.
This potential deficit scenario requires a review of fiscal policies, especially with regard to current spending and execution of the RRP investment.
The National Statistics Institute (INE) announced that Portugal ended 2024 with a budget surplus of 0.7% of GDP, above the 0.4% forecast by the Government. This result reflects higher revenues and reasonable containment of public spending, reinforcing the resilience of public finances in a context of economic adjustment.
The surplus, although positive, contrasts with more conservative forecasts from bodies such as the Bank of Portugal, which are already warning of potential deficits in 2025.
This development highlights the importance of rigorous fiscal management and opens space for future decisions on public investments and tax burden reduction.
The annual approval of accounts in commercial companies is a fundamental process to ensure transparency and financial compliance, and companies in Portugal must comply with the rules, established legal requirements and observe legal deadlines to avoid penalties.
Annual approval of accounts is a legal obligation for all commercial companies.
The process involves the analysis and approval of the accounting statements, regardless of the type of company/corporation, including the balance sheet, the income statement and the management report.
Civil companies in commercial form are subject to the provision of accounts, as are European public limited companies, public companies, companies with headquarters abroad and permanent representation in Portugal (in the part concerning the permanent representation itself) and individual establishments with limited liability.
Approval of accounts is essential to ensure transparency and accountability to partners and shareholders, suppliers, customers, the state, banks and other interested parties. The annual approval of accounts helps to assess the company’s financial performance and identify possible areas for improvement and action by the company.
The process of annual approval of accounts in commercial companies in Portugal generally occurs as follows:
• Preparation of financial statements by the company’s management
• Review of financial statements by certified public accountant and/or external auditor (if applicable)
• Convening of the General Meeting of shareholders/partners to approve the accounts
• Presentation of financial statements to shareholders/partners during the General Assembly meeting
• Discussion and voting to approve the company’s accounts
• Preparation by the company of the minutes of the General Assembly meeting, in which the decisions taken there will be recorded.
After the accounts have been approved, the accounting report is registered, which is translated into the deposit of the information that forms part of it.
The registration obligation is fulfilled through the submission of the IES (Simplified Business Information), thus fulfilling the obligations of submitting the annual declaration of accounting and tax information to the Tax Authority, the provision of accounts to the Commercial Registry Office, in addition to the provision of information for statistical purposes to the INE, the Bank of Portugal and the Directorate-General for Economic Activities.
The accounting record will include:
– minutes of approval of the accounts for the year and the application of results
– balance sheet, income statement and annex to the balance sheet and income statement
– demonstration of results
– statement of changes in equity/net worth
– cash flow statement
– attached to the financial statements, the legal certification of the accounts (if applicable)
– the opinion of the supervisory body, if applicable.
The legal deadlines established for the submission of the registration of the financial statements, which in the case of public limited companies (single-member or not), must be carried out by the 15th day of the seventh month following the date of the end of the financial year, as a rule coinciding with the end of the calendar year, therefore the financial statements must be registered by July 15th.
Failure to comply with the established deadlines may result in fines and other financial penalties and other legal consequences, including the impossibility of distributing dividends to shareholders/partners or completing registrations with the competent Commercial Board.
If you’re setting up a company in Portugal, here are some key facts you need to know:
✅ Every company must have at least one manager (gerente).
✅ Company managers are required to pay Social Security (Segurança Social).
✅ If a manager is already paying Social Security in another EU country, they can request an exemption in Portugal. However, this requires proof with an A1 form, which must be renewed every year.
✅ Fiscal Number (NIF) ≠ Social Security Number (NISS) – these are separate and serve different purposes.
Make sure your company stays compliant! For more details, consult a financial expert.
The Portuguese Government has announced a set of 30 measures to simplify the tax system, covering areas such as VAT, invoicing rules, and the Vehicle Tax (IUC).
Faster VAT Refunds
One of the main changes is the acceleration of VAT refunds. Businesses and self-employed professionals can receive refunds faster by providing a guarantee equivalent to the refund amount, allowing for an automatic process while the tax authority reviews the request.
Simplified Invoicing Rules
Invoicing rules will be simplified to make it easier for businesses and professionals to issue and manage invoices. This measure aims to reduce bureaucracy and costs associated with fulfilling tax obligations.
Changes to Vehicle Tax Payment
Regarding the IUC, also known as the “vehicle tax,” changes in payment deadlines are planned. Starting in 2026, taxpayers will have the option to pay the tax by February or in two installments, offering greater flexibility in meeting this tax obligation.
These initiatives are part of the Tax Simplification Agenda, approved by the Council of Ministers, aiming to make the relationship between taxpayers and the tax administration simpler and more efficient.
Joaquim Miranda Sarmento, the Minister of Finance, expressed optimism regarding Portugal’s economic future, forecasting sustained economic growth with a rate exceeding 3% in the medium term. These positive expectations reflect the Government’s confidence in the structural reforms being implemented and the country’s ability to attract investment and enhance its economic competitiveness.
According to the Minister, the Government’s planned reforms include key measures such as the progressive reduction of the Corporate Income Tax (IRC), which will make Portugal more attractive to both domestic and foreign companies. The reduction in the corporate tax burden is seen as a strategy to encourage the creation of new businesses, boost employment levels, and promote investment in strategic sectors.
Additionally, fiscal simplification is another crucial priority. The Government aims to reduce bureaucracy associated with the tax system, making it easier for companies and individuals to meet their tax obligations. This simplification will allow economic agents to focus more on growth and innovation, directly contributing to the potential increase in the country’s Gross Domestic Product (GDP).
Another important pillar of the reforms is the restructuring of the labor market, which aims to increase flexibility and efficiency in the labor market in Portugal. The Government intends to promote worker qualification, facilitate the transition to new employment areas, and reduce barriers to hiring, thereby creating a more dynamic and favorable environment for economic growth.
In summary, the Minister of Finance emphasized that these structural reforms are essential to consolidating Portugal’s economic growth. The goal of achieving economic growth above 3% in the medium term demonstrates the Government’s ambition to ensure sustainable development, improving citizens’ quality of life and reinforcing the country’s position in the global economy.
As part of the State Budget for 2025, the Portuguese government introduced a proposal that offers significant tax benefits aimed at young people up to 35 years old. This set of measures, reflecting a strategy to encourage the retention of young talent in Portugal, seeks to combat emigration and create better conditions for the settlement of skilled labor in the country.
According to the proposal, young people entering the job market for the first time, with annual incomes below 28,000 euros, will be fully exempt from paying the Personal Income Tax (IRS) during the first year of work. In subsequent years, a reduced tax rate will be applied progressively, offering considerable fiscal relief and greater savings capacity in the initial stages of their careers.
The government emphasizes that this measure aims to alleviate the tax burden on young workers and provide them with greater financial security during a phase of life where they face challenges such as housing demands, career beginnings, and the possibility of starting a family. The reduction in tax burdens will thus allow for greater flexibility in personal investments and contribute to improving the purchasing power of this segment of the population.
Furthermore, this fiscal policy is part of a broader plan to retain talent in Portugal and mitigate the negative effects of the emigration of young, qualified individuals to other countries—a phenomenon that has affected the labor market and economic growth in the country over the past decades. By creating a more attractive fiscal environment, the government hopes not only to retain skilled workers but also to attract young Portuguese emigrants who wish to return.
In summary, the tax benefits proposed in the State Budget for 2025 are a strategic attempt to create more favorable conditions for young people in Portugal, promoting a more welcoming economic environment and ensuring that the new generation has opportunities to thrive in the country.
Portuguese entrepreneurs, especially those subject to corporate income tax (IRC) or personal income tax (IRS) with organized accounting, are now required to have at least one bank account exclusively dedicated to financial transactions related to their business activities.
This requirement aims to increase transparency and rigor in the financial management of companies, ensuring better traceability of transactions and facilitating oversight by tax authorities. Additionally, it simplifies compliance with fiscal and accounting obligations, promoting more efficient financial management.
Entrepreneurs must adhere to this rule, as non-compliance may result in administrative and fiscal penalties. The measure is seen as a positive step to combat tax evasion and ensure companies’ compliance with legal norms.
This requirement also offers benefits to companies themselves, improving internal control and simplifying financial record organization. Entrepreneurs are encouraged to consult their accountants or financial advisors to ensure proper implementation of this measure in daily operations.
In 2023, European industry recorded a 9.8% increase in investment in Research and Development (R&D), surpassing the average global growth. This progress highlights European companies’ commitment to strengthening innovation and maintaining a competitive position in the international market.
Portugal, as part of the European Union, benefits from this growth context, with national companies intensifying efforts to modernize processes, create new products, and adopt emerging technologies. This scenario is particularly relevant for entrepreneurs seeking to explore new market opportunities and differentiate through innovation.
The rise in R&D investment is driven by strategic sectors such as technology, healthcare, and renewable energy, aiming to address global challenges like energy transition and digitalization. For Portuguese entrepreneurs, this means greater access to international partnerships, European funds, and tax incentives aimed at innovation.