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Tax benefits for companies

Special Regime of Group Taxation (RETGS)

A regime of "tax grouping on aggregation", whereby the taxable profits of the group correspond to the algebraic sum of the respective positive and negative results determined individually for each of the companies in that group.

A group of companies exists when a so-called "dominant company” holds, directly or indirectly, at least 75% of the capital of another so-called "dominated company or companies”, provided that such holding confers more than 50% of the voting rights.


Access conditions:
  • The companies belonging to the group all have their head offices and effective management in Portugal and all their income is subject to the general regime at the highest Corporate Income Tax (IRC) rate (21%);
  • The dominant company has held the shares in the controlled company for more than one year, with reference to the date on which the application of the regime begins;
  • The dominant company is not controlled by any other company resident in Portugal that meets the requirements to be qualified as dominant;
  • The dominant company has not waived the application of the regime in the previous three years, with reference to the date on which the application of the regime begins.

The special regime of group taxation does not apply to companies that, at the beginning or during the application of the regime, are in the following situations:
  • Have been inactive for more than one year or have been dissolved;
  • A special procedure of recovery or bankruptcy has been instituted against them and an order for the continuation of the action has been made;
  • Register tax losses in the three tax years prior to the beginning of the application of the regime, except for controlled companies if the shares have been held by the controlling company for more than 2 years;
  • Are subject to a IRC rate lower than the highest standard rate and do not waive its application;
  • Adopt a tax year different from that of the dominant company;
  • Do not take the legal form of a Limited Liability Company ("Sociedade por Quotas”), Public Limited Liability Company ("Sociedades Anónima”) or a limited partnership (with unlimited liability partners).

How to obtain

The option for the regime must be communicated to the Tax and Customs Authority (AT) by the dominant company, by sending the competent registration form until the end of the 3rd month of the tax period in which the application of the regime is intended to begin.