Personal Income Tax (Imposto sobre o rendimento das pessoas singulares – IRS) is paid by individuals on income obtained according to the categories above. In general, you will be considered as tax resident in Portugal if you spend:
- More than 183 days in Portugal within any 12-month period; or
- Fewer than 183 days in Portugal but have residential accommodation that the Tax Department considers to be your ‘permanent home’.
Residents of Portugal are liable for Portuguese tax on all their worldwide income and some capital gains. You could also attract taxes on property rental, transfer of real estate and vehicle sales.
Non-residents of Portugal are liable for Portuguese tax only on Portuguese-source income and certain capital gains on Portuguese assets, but remain liable for taxation in their country of residence
Non-Habitual Residents (NHRs) – Under this special regime for high value-added professionals, NHRs are taxed on self-employment and employment income obtained in Portugal at a flat rate of 20% for their first ten years in the country. Most foreign-source income is not taxable under the scheme. Capital Income (interest and dividends) can also be exempt under some circumstances and depending on any double tax agreement between Portugal and the taxpayer’s home country. For retirees, foreign pension income is generally taxed at a flat rate of 10% for the 10-year period.
IRS rates 2020 | ||
Taxable income (in euros) | Portugal | |
Tax Rate % | Amount Deductible | |
Up to €7,112 | 14.5 | – |
+ €7,112 to €10,732 | 23 | €604.54 |
+ €10,732 to €20,322 | 28.5 | €1,191.80 |
+ €20,322 to €25,075 | 35 | €2,515.63 |
+ €25,075 to €36,967 | 37 | €3,017.27 |
+ €36,967 to €80,882 | 45 | €5,974.54 |
N.B. In addition, a surtax of 2.5% or 5% is applicable to incomes over €80,000 and €250,000 respectively.
Please contact us if you have any questions or queries and your local representative will be in touch with you as soon as possible.
