Portugal

An individual is Portuguese tax resident if they spend more than 183 days, consecutive or not, in Portugal within any 12-month period starting or ending in the tax year, or if they maintain a habitual residence in Portugal at any point in that period with the intention of keeping it as their primary home.

Personal income tax returns are due by 30 June of the year following the one the income relates to, subject to extension in certain cases. Portugal operates a pay-as-you-earn system topped up by the annual return; married couples may opt to file jointly.

25% — Non-residents are taxed only on Portuguese-source income, including remuneration paid or borne by a Portuguese company or permanent establishment, at a flat rate of 25% on employment, self-employment, and pension income.

Union dues paid to Portuguese trade unions are deductible against employment or pension income at double their value, up to 1% of gross income. Rental income allows deduction of the expenses actually incurred to obtain it, and personal allowances take the form of tax credits rather than deductions from taxable income.

The Tax Incentive Scheme for Scientific Research and Innovation (IFICI), introduced in the 2024 State Budget, gives new tax residents in eligible research and innovation activities who have not benefited from the former Non-Habitual Resident regime a flat 20% rate on employment and business income, plus an exemption on most foreign-source income. Separately, the 'IRS Jovem' regime partially exempts employment and self-employment income for taxpayers up to age 35, on a declining scale over their first ten years of earning.

Taxable persons established in Portugal whose annual domestic turnover in the previous calendar year did not exceed EUR 15,000, and who do not carry out export operations or related activities, benefit from a VAT exemption under Article 53 of the VAT Code. The regime also extends to businesses established elsewhere in the EU whose Union-wide annual turnover does not exceed EUR 100,000, subject to a prior-notification procedure.

Article 9 of the VAT Code exempts a range of domestic activities from VAT, including medical and healthcare services, social welfare and social security services, education and vocational training, cultural and sporting activities run by non-profit bodies, postal services, financial and insurance operations, and the leasing of immovable property.

Only 50% of the gain on shares of unlisted micro and small companies is subject to tax. Portuguese tax residents can also have the gain wholly or partly exempted where the property sold was their primary residence in the last 12 months and the sale proceeds, net of any outstanding loans relating to the purchase of the property, are reinvested in acquiring, improving, or constructing another primary residence in Portugal or elsewhere in the European Union within 36 months of the sale, or in the 24 months before it.

Gains and losses from disposing of crypto-assets that are not securities are excluded from tax where the crypto-assets were held for 365 days or more, counting from the acquisition date even when that date is before 1 January 2023. This exclusion applies only to transactions between parties resident in the European Union or European Economic Area, or in a country with which Portugal has a double-taxation treaty or an information-exchange agreement.