The Deduction of Corporate Costs in Portugal: Recent Developments

In 2014, the general principle regarding the deduction of corporate costs under the Corporate Income Tax Code was changed. The requirement that a cost be indispensable in generating revenue was abandoned in favour of a new provision pursuant to which costs have to be incurred in order to obtain or secure income. This article explores how the tax authorities, taxpayers and courts can interpret this change, as well as recent international trends regarding this core issue of corporate taxation.