Not everything is limited to the reduction of the Corporate Income Tax rate from 20% to 19%, nor to the application of the reduced rate of 15% on the first EUR 50,000 for small and medium-sized enterprises.
The Portuguese State Budget for 2026 maintains important tax incentives aimed at strengthening companies’ equity, consolidating a stable framework for corporate tax optimization, as well as extending temporary tax benefits provided for in the Tax Benefits Statute (EBF).
i) Corporate Capitalization Incentive (ICE)
The Corporate Capitalization Incentive (ICE) remains in force in 2026, as provided for in the Portuguese State Budget and regulated under Article 43-D of the Tax Benefits Statute (EBF).
This incentive allows all companies, regardless of size, to deduct from taxable profit a portion of the net increase in equity, constituting one of the main instruments for structurally strengthening corporate solvency in Portugal.
The deduction is calculated by applying the average 12-month Euribor rate increased by 2 percentage points, with a temporary uplift of 20% applicable in the 2026 tax year.
Reference period
The amount of the deduction may not exceed, in each tax year, the higher of the following limits: EUR 4 million or 30% of tax EBITDA, under the terms of Article 67 of the Corporate Income Tax Code, with any excess being carried forward to the five subsequent tax years.
The calculation covers the current tax year and the six preceding tax years and is limited to transactions carried out from 2023 onwards.
Eligible increases
Eligible for the purposes of this incentive are:
- Cash contributions made upon the incorporation of companies or upon an increase in the share capital of the beneficiary entity.
- Contributions in kind made within the scope of share capital increases, corresponding to the conversion of credits into capital.
- Share premium contributions;
- Net accounting profit for the tax year applied to retained earnings, directly to reserves, or to a share capital increase.
Calculation of the net increase
The calculation of the net increase considers exclusively the amounts determined after deducting outflows in favor of shareholders, such as dividend distributions or capital reductions, and includes only movements carried out from 1 January 2023 onwards.
In practical terms, ICE 2026 enables companies to strengthen equity with a direct impact on their tax burden, while simultaneously improving solvency ratios and financing capacity.
ii) Recapitalization support by shareholders
The recapitalization support mechanism, provided for in Article 43-B of the EBF, also remains in force.
This incentive allows the shareholder to deduct up to 20% of the cash contribution made, with the deduction being applied against:
- distributed profits, or
- capital gains obtained on the disposal of the shareholding.
This is a particularly relevant mechanism from the shareholder’s tax perspective, aligning corporate interests with personal tax optimization.
Temporary EBF tax benefits extended until 2026
The tax benefits provided for in Articles 19-A, 28 to 31, 32-C, 52 to 55, 59, 59-D, 59-G, 62, 63 and 64 of the EBF remain in force until 31 December 2026.
This extension ensures regulatory stability while the evaluation process scheduled for 2026 is carried out, providing predictability for companies and investors.
What should companies do in 2026?
Portuguese companies should review their capital structure, assess potential capital increases or debt-to-equity conversions, and plan strategic contributions that allow them to maximize ICE and recapitalization incentives before the end of the tax year.
The 2026 tax year offers a particularly favorable tax framework for strengthening equity.
Belzuz Abogados, S.L.P. provides comprehensive support in tax and corporate planning, ensuring the correct application of ICE and the recapitalization support regime.
Proper planning can make the difference between a simple capital contribution and a genuine structural tax optimization strategy.
Contact our Tax and Corporate Law Department to analyze your specific case.