Disclaimer
The overview that follows is a generic summary in relation to which Azoresinvest make no representations or warranties. It is not advice, should not be treated as such. For any legal advice or to know more about relevant legislation applied to you, please, contact us.
Compliance and Deadlines:
Tax Residence & Liability to Income Tax Portugal:
Taxable Profits Calculation:
Portuguese accounting standards follow International Financial Reporting Standards (IFRS) closely and EU Directives apply to intra-community business transactions.
This tax can be carried forward during 5 years, but is limited 70% of taxable profits.
- Interest on shareholder loans that exceeds by more than 1.2 percentage points the 12 month Euro Interbank Offered Rate;
- Expenses that are titled by documents that do not contain a valid taxpayer id number;
- Penalties and fines;
- Corporation tax and surtaxes;
- Depreciation of private vehicles having a price in excess of €25,000 or €50,000, depending on the purchase date and the type of vehicle, as well as other expenses of a deemed luxury nature;
- Goodwill, with the odd exception;
- Provisions, with the exception of those for debt litigation, contractual guaranties granted to clients, remedies for environmental damages and mandatory provisions by banks and insurance companies;
- Interest in excess of €1 million or of 30% of EBIDTA, whichever the greater, except in the case of financial and insurance institutions;
- The writing off of bad credits that are less than 6 months old and of bad credits for which no recovery proceedings have been initiated, which are otherwise tax deductible within limits, namely 25% for those between 6 and 12 months old, 50% if 12 to 18 months, 75% if 18 to 24 months and 100% if older than 24 months.
The maximum rates of depreciation are set by law and tax deductions.
Maximum annual rates: 5% for industrial buildings; 12.5% to 25% for office equipment; 20% for electronic equipment and 33.33% for computers and software.
Some business may opt for “simplified accounting regime”, under which they will be taxed on a deemed profit calculated as a pre-defined percentage of sales that varies between 4% and 100%, in accordance with the type of business. During the first financial year this percentage is reduced by 50%, and, during the second, by 25%.
Corporation Tax Payment and Payments on Account
Generally, Corporation tax in respect of the previous financial year is payable in the 5th month of the new financial year. However, by default a resident business is required to make payments on account of the tax in respect of the current financial year, payable in the 7th, 9th and 12th months of the current financial year.
The payable amounts for a business having an annual turnover of less than €0.5m are 80% of the tax assessed in respect of the previous financial year, or 95% if the turnover is higher, except that the payment due by the 12th month may be skipped in the event the current year’s tax amount is expected not to warrant it. Then, by the 5th month of the new financial year the business either pays the excess tax due or gets reimbursed for any excess payment made.
Attractive Business Environment
The Azores offer one of the lowest VAT rates in Europe and some of the most competitive incentive packages within the European Union.
Key Advantages of Living or Investing in the Azores
Prime Atlantic Location at the crossroads of Europe, Africa, and the Americas, with regular connections to major global cities.
Mild, sunny climate most of the year, offering some of the highest annual sunshine levels in Europe.
Welcoming, multilingual population known for friendliness and hospitality.
Rich cultural heritage, historic architecture, renowned wines, and exceptional gastronomy at highly competitive prices.
Safe and peaceful environment, with one of the highest quality-of-life ratings worldwide.
Advanced infrastructure, ranked among the best globally by the World Economic Forum.
Skilled and dedicated workforce, known for productivity and adaptability.
Attractive residency pathways for investors, entrepreneurs, and qualified professionals.
Favorable tax environment, including Non-Habitual Resident (NHR) benefits and one of the lowest corporate tax rates in the world.
Robust incentive systems under Portugal 2030 and EU funding frameworks supporting economic, social, and territorial development.
ESTIMATED FLIGHT TIME TO THE AZORES:
Lisbon: 2 hours
Madrid: 3 hours
Paris: 4 hours
London: 4 hours
(USA) East Coast 4 hours
Canada: 5 hours
Strategic, Analytical & Project Services
Strategic & Analytical Services
Company profiling and business characterization
Business activity and market analysis
SWOT and external environment assessments
Macro-economic and competitive landscape evaluations
Economic and financial feasibility studies
Project Development & Management
Full project coordination and management
Innovation and modernization initiatives
Research & Development (R&D) projects
Internationalization strategies
Consultancy for financial institutions
Funding & Incentive Applications
Preparation of applications for incentive programs
Submission of investment proposals to banking institutions
Invest in the Future, Earn for a Lifetime
Discover the unmatched beauty and stability of real estate investment in the Azores. From oceanfront homes to mountain retreats, every property offers long-term growth, tax benefits, and a lifestyle unlike anywhere else in Europe.