How to record and deduct tax losses

What is it for?

When a company has a tax loss in a period, that loss can be deducted from the taxable profit of later periods. fiscaldoo keeps each loss in a list (Tax losses carried forward), shows how much has been deducted and how much is left, applies the legal limit to the deduction in each Form 22 (Modelo 22) and refuses deductions the law does not allow.

Pending validation by a certified accountant: the 65 % limit, the time limit (“no deadline” since Law no. 24-D/2022), the block on change of ownership (Corporate Income Tax Code (CIRC), art. 52), the order of deduction, which the screen applies as described below, and the Modelo 22 field numbers quoted in this article (777 and 346).

When to use it?

• A period's Modelo 22 gave a negative taxable profit: record the loss to deduct it in the following years.
• You are going to prepare the Modelo 22 of a profitable period and the company has losses from previous years still to deduct.
• More than 50 % of the ownership of the capital changed: the loss becomes Blocked.
• It is not for calculating taxable profit: that is done in Modelo 22 (How to prepare the corporate income tax return, which explains tax adjustments, autonomous taxation and surcharges).

Where to find it?

• Accounting › Declare › Corporate income tax › What is there to do with the corporate income tax? › Tax losses carried forward (panel button, in the Supporting lists area), with the Accountant profile. The list has no menu item of its own.
• To deduct: Accounting › Declare › Corporate income tax › Form 22 (corporate income tax), Tax losses tab.

Before you start

• Profile in the example: Accountant.
• Example: Empresa Demonstração, Lda, with the 2025 Modelo 22 showing taxable profit of 32.104,16 €. The two losses in the example (2023: 15.000,00 €; 2024: 12.000,00 €) are made up for this demonstration.

How to use it

1. Open Declare › Corporate income tax › What is there to do with the corporate income tax? and, under Supporting lists, click Tax losses carried forward. The list is empty: “Register here the tax loss of each period. It is deducted in the Modelo 22 of the following periods, within the legal limit and deadline.”
2. Click New. Fill in Period start (01/01/2024), Period end (31/12/2024) and Tax loss (12.000,00, without a minus sign). The screen immediately shows the Deadline: “No deadline: loss of a period starting in 2023 or later (CIRC art. 52.º, n.º 1, Law 24-D/2022).” Save. Repeat for 2023 (15.000,00 €).
   • Modelo 22 of the loss links the loss to the Modelo 22 that determined it (the amounts and period come from there). Without a link, you type it by hand, as in the example.
   • Longer deadline (SME) and Change of more than 50 % of the ownership affect the time limit and the block (see below).
3. Open Modelo 22 - 2025, Tax losses tab. It shows: Tax losses still to deduct 27.000,00 €; Legal limit of the deduction 20.867,70 € (65 % of 32.104,16 €); Tax losses deducted (field 777) 0,00 €. Pending validation by a certified accountant: the Modelo 22 field numbers quoted in this article (777 and 346).
4. Click Suggest tax losses to deduct, among the buttons at the top of Modelo 22. The screen fills in the list starting with the oldest loss and stops at the limit: 15.000,00 € of the 2023 loss and 5.867,70 € of the 2024 one, 20.867,70 € in total. The Taxable profit after tax losses becomes 11.236,46 €, which is the Taxable amount (field 346). Clicking the button again gives the same result, without duplicating lines.
5. Go back to the Tax losses carried forward list: the 2023 one is Fully deducted (15.000,00 € deducted, 0,00 € still to deduct) and the 2024 one is Still to deduct, with 5.867,70 € deducted and 6.132,30 € still to deduct, for the next Modelo 22.

Expected result

• Each loss has Deducted, Still to deduct and State: Still to deduct, Fully deducted, Expired or Blocked. Deadline to confirm only appears on the form while one of the dates is missing.
• Recording and deducting losses creates no journal entries: it is return data.
• In Modelo 22, field 777 and the taxable amount (field 346) reflect the deductions. The Modelo 22 Taxable Profit does not change: the deduction is a separate line. Pending validation by a certified accountant: the Modelo 22 field numbers quoted in this article (777 and 346).

Important notes

• The limit belongs to the Modelo 22, not to each loss. With two losses, the sum of the deductions cannot exceed the limit (65 % of taxable profit in the example). What is left over carries forward to later periods.
• The same loss only appears once in each Modelo 22. To change the amount deducted, edit the existing line.
• The selector offers every loss, even expired ones (“Prejuízo fiscal de 2017: 1.000,00 €”): the refusal only appears when you save.
• Time limit. The Deadline field explains the case as soon as both dates are filled in. The 2023 and 2024 losses in the example show “No deadline: loss of a period starting in 2023 or later…”. Losses before 2023 only have no time limit if the old period was still running on 01/01/2023 (Law no. 24-D/2022, art. 228, no. 1): one from 2014 or 2019 shows “No deadline: the original deadline of … would end…, still running on 1 January 2023…”; one from 2010 or 2017 shows Expired. Ticking Longer deadline (SME) on the 2017 one changes it to “No deadline: the original deadline of 12 periods (SME)…”. Pending validation by a certified accountant: the SME framework, the REAID exception (art. 228, no. 2) and the 75 % limit for 2020 and 2021 losses (Law no. 27-A/2020), which the screen does not apply: it always uses 65 %.
• Indirect methods. In a period in which profit was determined by indirect methods (Indirect methods option on the tab), the Legal limit of the deduction becomes 0,00 €. Tick the option before deducting: if the Modelo 22 already has deductions, the screen accepts the tick, the lines stay and the taxable amount stays reduced. In that case, click Suggest tax losses to deduct: the lines are removed and the taxable amount goes back to the taxable profit.
• The screen does not read losses from the previous Modelo 22 on its own: you must record them in the list (or link them to the Modelo 22 that determined them).

Common problems

“The deductions of tax losses in this Modelo 22 (27.000,00 €) exceed the legal limit of 20.867,70 €”

• Cause: you added by hand one line per loss, 15.000,00 € and 12.000,00 €, and the sum exceeds the limit.
• What to do: reduce the amounts or click Suggest tax losses to deduct. The message says: “the part not deducted stays for later periods.”

“The loss of the period ending on 31/12/2024 is blocked”

• Cause: the loss has Change of more than 50 % of the ownership ticked. The message continues: “a titularidade mudou em mais de 50 % (CIRC art. 52.º, n.º 8). Só desmarque o bloqueio se se aplicarem as exceções do n.º 9.” (ownership changed by more than 50 %; only untick the block if the exceptions of no. 9 apply). The state becomes Blocked.
• What to do: only untick it if a legal exception applies. Pending validation by a certified accountant: the exceptions in no. 9.

“The loss of the period ending on 31/12/2017 has expired…”

• Cause: the old time limit (5 periods; 12 for SMEs) had already ended before 01/01/2023, the loss is Expired and Modelo 22 refuses the deduction: “…só podia ser deduzido até ao período que termina em 31/12/2022 (CIRC art. 52.º, n.º 1). O Modelo 22 é do período que termina em 31/12/2025.” (it could only be deducted up to the period ending on 31/12/2022; the Modelo 22 is for the period ending on 31/12/2025).
• What to do: if the company is an SME under the law, tick Longer deadline (SME). Otherwise, the loss can no longer be deducted.

“The tax loss of the period ending on 31/12/2022 must be a positive amount…”

• Cause: you typed the loss with a minus sign.
• What to do: type it without a sign. A period with taxable profit has no loss to record.

“That tax loss is already deducted in this Modelo 22. Change the amount of the existing line.”

• Cause: you added a second line for the same loss.
• What to do: edit the amount of the line that already exists.

The Auditor cannot change anything

• Symptom: “O seu perfil (Auditor) é só de leitura: consulta tudo e nunca cria, altera ou elimina nada.” (your profile (Auditor) is read-only: it consults everything and never creates, changes or deletes anything). The Auditor does not have the Declare menu (only the Audit app): they can only reach this list through a direct link.
• What to do: nothing. The Accountant records the losses.

“Another model is using the record you are trying to delete…”

• Cause: you tried to delete a loss already used in a Modelo 22. The message appears in English even in the Portuguese interface. A loss without deductions can be deleted.
• What to do: if the deduction is wrong, first remove the line from the Modelo 22 Tax losses tab. If it is right, the loss stays in the list.