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News & Analysis

Portugal’s Incentive to the Capitalisation of Companies: Two years on – Key developments and state of the art

14 May 2026 by Pérez-Llorca - Portugal

The Incentive to the Capitalisation of Companies (Incentivo à Capitalização de Empresas – “ICE”), introduced by the 2023 State Budget, was implemented in the broader context of the discussions at EU level surrounding the proposed Debt-Equity Bias Reduction Allowance (DEBRA) initiative, by promoting equity financing through the introduction of a notional interest deduction – the tax incentive. By establishing a "notional interest" deduction system with deductibility caps that are significantly more generous than those applicable to net financing costs under the general Portuguese interest barrier rule, the ICE has effectively enabled a hybrid approach to corporate capitalisation – one that combines the economic substance of equity with a tax deduction that mirrors the treatment traditionally reserved for debt financing.

News & Analysis

A remote (place of business) PE risk

30 January 2026 by Pérez-Llorca - Portugal

Over the past decade, the way we work has undergone a fundamental transformation: employees are now running core business operations from their kitchen tables, in jurisdictions that employers barely thought about from a tax perspective. This shift has significantly altered the international tax risk landscape.
News & Analysis

The anti-abuse nature of Portuguese aggravated property taxes

06 January 2026 by Pérez-Llorca - Portugal

The Portuguese aggravated Municipal Property Tax (“MPT”) and Property Transfer Tax (“PTT”) has gained renewed attention following the recent publication of the first arbitration award addressing the matter, representing a significant development in the interpretation and application of the aggravated MPT and PTT regimes – the aggravated property taxes.
News & Analysis

Portugal: The reduced VAT rate on urban rehabilitation works in Portugal: An update

02 June 2025 by Pérez-Llorca - Portugal

The applicability of the reduced VAT rate to urban rehabilitation works, under item 2.23 of List I annexed to the Portuguese VAT Code (“Item 2.23”), has long been the subject of legal debate.
News & Analysis

Portugal: The reduced VAT rate on urban rehabilitation works in Portugal: An update

29 May 2025 by Pérez-Llorca - Portugal

The applicability of the reduced VAT rate to urban rehabilitation works, under item 2.23 of List I annexed to the Portuguese VAT Code (“Item 2.23”), has long been the subject of legal debate. Prior to October 7 2023, the existing legal framework raised considerable uncertainty regarding the conditions under which the reduced rate could be applied.