The Fiscal Transparency Regime (Updated Framework for State Budget 2026)

By Cooperate Legal Services, Lda.

The fiscal transparency regime serves as a mechanism within the Portuguese legal system designed to ensure tax neutrality and fairness, avoiding double taxation while combating tax evasion.

Typically, economic double taxation occurs when profits are taxed twice: first at the corporate level via Corporate Income Tax (IRC) and subsequently at the individual level via Personal Income Tax (IRS) upon distribution to shareholders.

The fiscal transparency regime breaks this logic: a "transparent" company calculates its taxable profit but does not pay IRC. Instead, this taxable base is directly imputed to its partners or shareholders in...continues in the PDF...