General rates
It is anticipated that the limits of each bracket for the general PIT rates will be updated by approximately 4.6%, resulting in the following table:
Taxable income (€) |
Rate |
Amount to deduct (€) |
|---|---|---|
Up to 8,059 |
13.00% |
0.00 |
More than 8,059 up to 12,160 |
16.50% |
282.07 |
More than 12,160 up to 17,233 |
22.00% |
950.91 |
More than 17,233 up to 22,306 |
25.00% |
1,467.91 |
More than 22,306 up to 28,400 |
32.00% |
3,029.38 |
More than 28,400 up to 41,629 |
35.50% |
4,023.14 |
More than 41,629 up to 44,987 |
43.50% |
7,353.76 |
More than 44,987 up to 83,696 |
45.00% |
8,028.38 |
More than 83,696 |
48.00% |
10,539.00 |
The limits of the brackets for the general PIT rates are updated by 4.6%, above the projected inflation rate.
Youth PIT
It is proposed to extend the Youth PIT tax regime, making it applicable to income from dependent and independent work earned by taxpayers (not dependents) who are up to 35 years old, while also eliminating the condition related to the completion of a cycle of studies.
It is also proposed to increase the duration of this benefit to ten years, applying in the first year of income generation in which the option for the benefit is exercised and in the nine subsequent years in which income is obtained and the option is also exercised.
Additionally, it is proposed to increase the applicable exemption as follows:
- 100% in the first year;
- 75% in the second, third, and fourth years;
- 50% in the fifth, sixth, and seventh years;
- 25% in the eighth, ninth, and tenth years.
It is anticipated that the Youth PIT will be expanded in terms of the number of beneficiaries, the duration and the amount of the benefit.
The amount of exempt income under the above terms is limited to an amount corresponding to 55 times the value of the Social Support Index/IAS (€ 28,009.30, considering the IAS currently in force).
However, a transitional regime is created which establishes that taxpayers start to qualify for this exemption in the year following the number of years of income generation from categories A and B already elapsed, not considering, for this purpose, the years in which they were considered dependents.
The exemption does not apply in the years in which income from categories A and B is not earned, resuming its application for the remaining years income is obtained by the taxpayer , until a total of ten years of exemption or the age limit of 35 years is reached.
It is proposed to exclude this benefit for taxpayers who:
1. benefit or have benefited from the regime applicable to non-habitual residents;
2. benefit or have benefited from the tax incentive for scientific research and innovation, provided for in article 58-A of the Tax Benefits Code (EBF);
3. have opted for taxation under the tax regime applicable to ex-residents;
4. do not have their tax situation regularized.
The taxpayer may request that the paying entity reflect the application of this regime in the withholding taxes due, by informing the entity of the year of application of the exemption he/she currently is.
Meal allowance
It is proposed to increase the value of the meal allowance provided through meal vouchers that is not subject to taxation to a daily amount of € 10.20. This means that only the portion exceeding 70% of the legally established limit (currently € 6) will be considered as employment income, instead of the previous 60%.
Specific deduction – Category A and Category H
An update is proposed for the specific deduction applicable to employment and pension income to an amount corresponding to 8.54 times the value of the IAS. Based on the current IAS value, the specific deduction amount would be € 4,349.08.
Subsistence level
It is proposed to update the reference value of the subsistence level, in accordance with the increase in the monthly minimum national wage.
Autonomous taxation rates
It is proposed to update the limits for the acquisition cost of passenger or mixed vehicles from € 20,000 to € 30,000 for the purposes of applying autonomous taxation on expenses incurred by taxpayers who have or should have organized accounts, within the scope of a business or professional activity.
Withholding taxes for self-employed workers
It is proposed to reduce from 25% to 23% the withholding tax rate applicable to income from the professional activities listed in the table referred to in Article 151 of the PIT Code.
Payments on account
It is proposed to reduce the amount of payments on account due by taxpayers earning category B income, so that it is reduced to 65% of the amount resulting from the application of the current formula (currently 76.5%).
Withholding taxes on overtime work
It is proposed that the waive from the withholding tax applicable to employment income from overtime work obtained in Portuguese territory by non-resident taxpayers will now have as a limit the overtime income up to 100 hours (currently 50 hours).
Additionally, it is proposed that the remuneration for overtime work obtained by resident taxpayers will be subject to 50% of the autonomous withholding tax rate as from the first hour of overtime work (currently from the 101st hour).
2025 State Budget Law Proposal
Download the PwC newsletter and stay informed about our experts' analysis of the 2025 State Budget Law Proposal.
2025 State Budget
Follow the tax changes introduced by the 2025 State Budget Law Proposal. PwC clarifies your doubts!
Contact us
