Indirect Taxes

Value Added Tax (VAT)

No amendments to the VAT Code are proposed.​​

The VAT exemption on supplies of goods for agricultural production (fertilisers, soil improvers, soil correctives and animal feed) and of food for companion animals sheltered by animal protection associations is extended until 31 December 2027.​

Tax on Alcohol, Alcoholic Beverages and Beverages with Added Sugar (IABA)

Until 31 December 2027, the alcohol tax rate provided for in Article 76 of the Excise Duties Code (“Código dos IEC”) is set at 25% of the standard rate for spirits and liqueurs made exclusively from strawberry tree fruit and produced and distilled in the municipalities specified in the law, located namely in the Algarve, the interior of the Centro region and the Alentejo. This provision replicates the terms of the 2026 State Budget.​

Tax on Petroleum and Energy Products (ISP)​

The regime for the gradual phase-out of harmful exemptions on petroleum and energy products is maintained on terms similar to those of the 2026 State Budget, with no changes to the applicable taxation percentages.​

The subsidies for coloured and marked diesel and other fuels for farmers, aquaculture operators and fishers also remain unchanged. ​

The use of coloured and marked diesel by vehicles of forest firefighting teams integrated into the Integrated Rural Fire Management System (“Sistema de Gestão Integrada de Fogos Rurais”) is likewise preserved. ​

No reference is made to the provision in the 2026 State Budget on the use of coloured diesel by the extractive industry, which may raise doubts as to whether it will remain in force in 2027.​

Single Circulation Tax (IUC)​

The additional IUC charge provided for in Article 216 of Law No. 82-B/2014, of 31 December, applicable to diesel vehicles in categories A and B, remains in force. No amendments to the IUC Code are proposed.​