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Measures List
First Prev Next Last Separator
Measure Name
Date when measure came into force
Increase PIT rates 2010/07/01
Change in rates 2010/07/01
Tax credits and allowances (PIT) 2011/01/01
Special Surcharge 2011/09/08
PIT State Budget changes 2012/03/30
Changes to Personal Income Tax 2012/12/31
Results 1 - 6 of 6.

Generic Tax Name Personal income tax
Tax name in the national language Imposto sobre o rendimento das pessoas singulares - IRS
Tax name in English Personal income tax
Member State PT-Portugal
Tax in force since 1989/01/01
If abolished, date on which the tax ceases to apply
Business version date 2015/01/01
Version date 2015/02/17
This file was last updated on

Type of tax
Direct taxes Personal income tax
Corporate income tax
Other

Indirect taxes VAT
Excise duty (EU harmonised)
Alcoholic beverages
Energy products and electricity
Manufactured tobacco
Other

Social security contribution Employers
Employees
Other
 
Legal base

IRS Code, enacted by Decree Law 442-A/88 of 30 November 1988, as amended; Tax Incentives Statute (EBF), enacted by Decree Law 215/89 of 1 July 1989, as amended; Decree Law 42/91 of 22 January 1991; Law 85/98 of 16 December 1998; Regional Legislative Decree 2/99/A of 20 January 1999; Decree Law 74/99 of 16 March 1999; Regional Legislative Decree 3/2001/M of 22 February; Law 16/2001 of 22 June; Decree Law 198/2001 of 3 July; Law 26/2004 of 8 July; Decree Law 193/2005 of 7 November; Law 2/2007 of 15 January; Decree Law 108/2008 of 26 June; Law 12-A/2010 of 30 June; Law 55-A/2010 of 31 December; Law 49/2011 of 7 September; Law 64-B/2011 of 30 December; Law 66-B/2012 of 31 December; Law 83-C/2013 of 31 December; Law 82-E/2014 of 31 December.

 
Who sets
The tax rate is set by




The tax base is set by




The reliefs are set by




Comments
 
Beneficiary





Comments
  • As of 2007 local authorities (Municipalities) may set the level of their share in the revenue from personal income tax, up to 5 % of their resident taxpayers' tax liability. If this rate is set below 5%, the difference will be credited against the taxpayer's liability
  • 0.5 % of the tax liability may be allocated by the taxpayer to a church or a charity (IPSS)
 
Geographical Scope

Whole country.

 
Taxpayers
Domestic-source income of non-residents is Taxed
Not Taxed
Comments

Employment incomes of married couples are Taxed jointly
Taxed separately
Comments


Comments

Resident individuals are subject to tax on their worldwide income (including capital gains) while non resident individuals are subject to tax only on income derived in the Portuguese territory. Individuals are generally deemed to be resident if they stay in Portugal for more than 183 days a period of 12 months or if they have a place of abode available on the last day of a a period of 12 months and it can be inferred from the circumstances that they have an intention to keep it and occupy it as their permanent residence. Married taxpayers can either fil a seperate or a joint tax return.

 
Tax object and basis of assessment
As general rule, taxable income under personal income tax includes























Comments

Income considered Domestic income
Worldwide income (subject to double-tax relief)
Comments

Benefits in kind
The following benefits in kind are usually (partially or fully) taxable












Comments


Comments

Income falling within the following categories:

Category A: Income from dependent employment

Category B: Income from self employment (business and professional activities)

Category E: Investment income

Category F: Income from immovable property

Category G: Capital gains and other increases in wealth (e.g. winnings from lotteries)

Category H: Pensions.

 

 

The household coefficient, by which income is divided, considers "1" for each taxpayer and "0.3" for each dependent or ascendant.

 
Deductions, Allowances, Credits, Exemptions
Deduction for professional expenses.
The deduction is:





Comments

Deductions from the tax base
The following items are usually (partially or fully) deductible

















Comments

Allowances
The basic yearly allowance for an individual amounts to:
The basic yearly allowance for a couple amounts to:
Additional allowance for 1st child
Additional allowance for 2nd child
Additional allowance for 3rd child
Additional allowance for additional child
Additional allowance for old age dependents
Comments

The following allowances are specific to each income category:

Category A

  • € 4,104. This allowance can go up to 75 % of twelve times the 2010 minimum monthly wage (i.e. € 4,275), if the taxpayer has incurred training expenses or compulsory contributions to professional associations. However, if compulsory contributions to social security schemes and state health care subsystems exceed this limit, the total amount of these contributions will be deductible
  • Compensations paid by the employee to the employer in case the former ceases working for the latter without due warning, under a court order or legal obligation
  • The trade union dues that are not consideration for benefits (i.e. health care, education, assistance for the elderly, housing, insurance or social security benefits), up to the limit of 1 % of the taxpayer's gross income falling within category A, increased by 50 %

Category B

  • Expenses incurred in connection with the business or professional activity are deductible, provided they are recorded in accounts organized according to the standard accounting system, up to certain limits laid down by the law.

 

Simplified regime

Income from business and professional activities may be taxed under the ‘simplified regime', according to which, net income is assessed by applying a coefficient of 0.15 to sales, hotel and restaurant businesses, a coefficient of 0.75 to income from activities falling under art. 151, a coefficient of 0.35 to income from activities not included in the former two items, a coefficient of 0.95 coefficient to income from royalties,a 0.3 to subsidies or grants not related with production and 0.1 to subsidies related to production and other income from cat. B. This ‘simplified regime' is applicable for renewable three-year periods, if the taxpayer is not required by law to apply the standard accounting system and does not opt for it and if in the previous year gross income falling within this catgory does not exceed € 200,000.

If this threshold is exceeded for two consecutive years or if it is exceeded by 25% in a given year, taxation under the ‘simplified regime' ceases to apply and the taxpayer is required to introduce the standard accounting system in the following year.

Category F

  • All expences needed to ensure such income, excluding financial expenses, furniture, household appliances and articles of comfort and decoration; includes maintenace expenses, the immovable property municipal tax (IMI) and stamp duty.

Category G

  • Only 50 % of the net capital gains other than those derived from the sale of shares or other securities is subject to tax.

Category H

  • The standard allowance is € 4,104,00.
  • The trade union dues that are not consideration for benefits (i.e. health care, education, assistance for the elderly, housing, insurance or social security benefits), up to the limit of 1 % of the taxpayer's gross income falling within category H, increased by 50 %
  • Compulsory contributions to social security schemes and state health care subsystems

Credits
The basic yearly credit for an individual amounts to:
The basic yearly credit for a couple amounts to:
Additional credit for 1st child 325.00  EUR/National currency  or  %  of tax base
Additional credit for 2nd child 325.00  EUR/National currency  or  %  of tax base
Additional credit for 3rd child 325.00  EUR/National currency  or  %  of tax base
Additional credit for additional child 325.00  EUR/National currency  or  %  of tax base
Additional credit for old age dependents 300.00  EUR/National currency  or  %  of tax base
There are tax credits for:

















Comments

Tax credits:

The basic credit for an individual was replaced by a credit relative to household expenses per liable individual, 35% of household expenses with a limit of €250 per taxpayer, in single parent households the percentage is increased to 45% and the limit to €335.

Personal credits further consider:

  • credit for dependants increased in €125 for dependants whose age does not exceed 3 years old.
  • when there is only one ascendant who meets these conditions, the tax credit €410;
  • 15% of health care expenses and health insurance with a limit of €1,000; 
  • 30% of education and training expenses, up to a limit of €800;
  • 20% of alimony expenses;
  • 25% of expenses with retirement homes for (or homes for disabled) taxpayers, their ascendants and other close relatives whose income does not exceed the minimum monthly wage (i.e. € 475.00), up to a limit of 85% of the minimum monthly wage (i.e. € 403.75)
  • 15% of interest on loans contracted (up to 31.12.2011) for the acquisition, construction or improvement of the taxpayer's permanent residence, or for renting out immovable property which is the tenant's permanent residence, up to a limit of € 296; or 15% of the rent paid by a tenant, for his permanent residence, under a contract typified by the law, up to a limit of € 502; limits for interest and principal repayments on loans contracted for the acquisition, construction or improvement of the taxpayer's permanent residence or for rents, are increased for taxpayers with lower income. The tax credit for housing expenses will be phased out until 2016 (interest) and 2018 (rents). 
  • an amount equal to 4 times the Social Benefit Index for each disabled taxpayer, an amount equal to 1.5 times the SBI for each disabled dependant or ascendant whose income does not exceed the minimum pension; an additional amount equal to 4 times the SBI for each disabled taxapayer or dependant whose certified permanent disability degree is at least 90%;
  • 30% of education and rehabilitation expenses with disabled taxpayers or disabled dependents and 25% of life insurance premiums.

Total tax credits and tax benefits (except for credits for disability and double taxation) are limited, except for the lowest bracket. However, limits are increased by 10% for each dependant not liable to PIT.

5% of VAT paid for certain services (restaurants, hotels, hairdressers, car repair) up to a limit of €250 (not included in tax benefits limits).

Tax benefits:

  • 20% of amounts invested in individual retirement savings plans (PPR) and in social security individual accounts, up to a limit of € 400.00 for each taxpayer under 35 years old, € 350.00 for each taxpayer over 35 and under 50 years old and € 300.00 for each taxpayer over 50 years old. 
  • 25% of grants to charities and other entities, under the conditions laid down by the law (Article 63 of EBF).

Losses
Losses can be
Carried-forward for Indefinite
 Years
Carried-back for Indefinite
 Years
Transferred to spouse or partner
Comments

Deduction is limited to 75% of profit.


Exemptions
The following income is exempted from income tax























Comments


Comments
 
Rate(s) Structure
The following personal income tax rates apply to aggregate annual income (allowances not included)
Bracket 1 From  0.00  EUR/Natcur
To  7,000.00  EUR/Natcur
Rate: 14.50 %
Bracket 2 From  7,000.00  EUR/Natcur
To  20,000.00  EUR/Natcur
Rate: 28.50 %
Bracket 3 From  20,000.00  EUR/Natcur
To  40,000.00  EUR/Natcur
Rate: 37.00 %
Bracket 4 From  40,000.00  EUR/Natcur
To  80,000.00  EUR/Natcur
Rate: 45.00 %
Bracket 5 From  80,000.00  EUR/Natcur
To   EUR/Natcur
Rate: 48.00 %
Comments

Last income bracket has a surtax of 2.5% for taxable income between €80,000 and €250,000, 5% for taxable income above €250,000;

Surtax of 3.5% for taxable income above the annual minimum wage, with a credit of 2.5% of the monthly minimum wage for each dependant non liable to PIT.

Income from ommovable property (rents) can be autonomously taxed, at a rate of 28%.


Regional taxes
Regional taxes are (rate in capital region) A lump-sum amount:
A percentage of income:
A tax surcharge:
Comments

Local/municipal taxes
Local taxes are (rate in capital city) A lump-sum amount:
A percentage of income:
A tax surcharge:
Comments

Special surcharges
There are special surcharges in the form of:
Surcharge 1 : Name:
A lump-sum amount:
A percentage of income:
A tax surcharge:
Comments

Separate taxation
Separate taxation applies to the following items: Employment income
Income from business or self-employed activities
Income from sport and entertainment activities
Benefits in kind (company car, meal cheques, etc)
Pension income
Owner-occupied immovable property
Dividends
Interests from government bonds
Interests from corporate bonds
Interests from special saving accounts
Interests from deposits
Royalties
Income from renting immovable property
Income from renting movable property
Capital gains on immovable property
Capital gains on movable property
Inheritance
Annuities from life insurance
Prizes and awards
Scholarships
Income from occasional activities
Revenues from donations and gifts
Revenues from lotteries and games activities
Comments

Withholding taxes
The tax is withheld when paid to residents on: Dividends: 28.00 %
Final Creditable
Interests from governments bonds: 28.00 %
Final Creditable
Interests from corporate bonds: 28.00 %
Final Creditable
Interests from special saving accounts:
Final Creditable
Interests from deposits: 28.00 %
Final Creditable
Comments
  • Only 50 % of the gross domestic dividends (or dividends received from EU entities covered by the 'parent-subsidiary directive') should be included in its annual taxable base. 
  • In the Autonomous Region of Azores, the tax liability is reduced by 20 %. 


Comments
 
Tax due date

31st July. For taxpayers deriving income from self-employment, three advance payments may be due on the 20th of July, September and December. Withholding tax is generally due by the payer of the income on the 20th day of the month following the day in which the taxable event took place (i.e. payment date in most cases).

 
Tax collector

The tax is assessed and collected annually by the Tax and Customs Authority (AT) generally on the basis of the tax return submitted by the taxpayers. Advance payments due on income from self‑employment (category B), as well as withholding tax, are credited against the final tax liability.

 
Special features

Non taxable limits

There are no thresholds for the other income categories. However, for taxpayers whose income stems primarily from paid employment (category A) and pensions (category H), the application of the tax rates may not result in after-tax income under  € 8,500. (Article 70 of IRS Code)

10% if disabled taxpayers income up to € 2,500.

 

Non‑residents

Non resident individuals not acting through a permanent establishment or a fixed base situated in Portugal are taxable only on Portuguese sourced-income. In the absence of a Double Taxation Agreement:

  • Interest and dividends are subject to a final withholding tax of 28%. However, income from debt‑securities registered in a centralized system is exempt, subject to certain conditions laid down by the law
  • Royalties, fees for technical assistance, know-how and the leasing of equipment as well as agency commissions are subject to a final withholding tax of 25%
  • Other income from self employment (independent personal service) as well as income from dependent employment (dependent personal service), director's fees, and pensions are subject to a final withholding tax of 25%
  • Non resident individuals who receive income from immovable property situated in Portugal must file a tax return and be taxed at a special rate of 28%. However, residents in another Member State of the EU, or of the EEA provided there is exchange of information in tax matters, may opt for the general rates applicable to residents in Portugal, in which case they must make their worldwide income known to the Portuguese tax authorities
  • Capital gains derived from the sale of shares or other securities issued by Portuguese resident companies as well as warrants issued by Portuguese resident companies and financial derivative instruments traded on a regulated stock market are in general exempt from tax, subject to certain conditions laid down by the law. If these conditions are not fulfilled, the net capital gains are taxed at 28% (computed from an individual assessment)
  • Other capital gains (e.g. derived from the sale of immovable property or industrial or intellectual property) are taxed at 28% (also computed from an individual assessment). However. residents in another Member State of the EU, or of the EEA provided there is exchange of information in tax matters, may opt for the general rates applicable to residents in Portugal, in which case they must make their worldwide income known to the Portuguese tax authorities
 
Economic function







Comments
 
Environmental taxes



Comments
 
Tax revenue
ESA95 code d51m (d51aa)

Year
Annual tax revenue (millions)
Currency
Tax revenue as % of GDP
Tax revenue as % of total tax revenue
2012 9,795.52 EUR 5.82
2011 10,510.79 EUR 5.97
2010 9,631.64 EUR 5.35
2009 9,633.70 EUR 5.49
2008 9,601.79 EUR 5.37
2007 9,283.83 EUR 5.29
2006 8,454.09 EUR 5.08
2005 7,937.41 EUR 5.00
2004 7,499.15 EUR 4.92
2003 7,459.47 EUR 5.10
2002 7,310.04 EUR 5.12
2001 7,219.81 EUR 5.32
2000 6,770.81 EUR 5.27

Comments