Incentive for Business Capitalization – ICE

State Budget 2024 – Tax Benefits

The Incentive for Business Capitalization (ICE) is a tax benefit provided for in Article 43-D of the EBF Code for companies with their head office or effective management in Portuguese territory. The legal form or size of the company is not relevant for enjoying this benefit, as long as they meet the legal requirements listed in paragraph 7 of the same regulation. In the 2024 State Budget, the government changes the application of a fixed rate of 4.5% or 5% for SMEs, Micro, and Small and Medium Capitalization companies, in effect in the 2023 State Budget, to a variable rate indexed to the 12-month Euribor.

What does the benefit in the 2024 State Budget consist of?

  1. The benefit consists of a deduction from the corporate tax base (IRC) up to an annual limit of 4 million euros or 30% of EBITDA (Article 67 of the CIRC). The portion of the deduction that exceeds the 30% EBITDA limit is deductible in determining the taxable profit for one or more of the subsequent five tax periods, applying a variable rate indexed to the 12-month Euribor, with an added spread of 1.5% and 2% for SMEs, Micro, and Small and Medium Capitalization companies.
  2. Increase, in the first year of application, of the benefit by: – 50% in 2024; – 30% in 2025; – 20% in 2026;
  3. Adjustment of the reference period from 10 years to 7 years;
  4. Change to the eligibility of capital increases, with cash injections when financed by the Public Sector (SP) or other entities with special relationships.