PIT – 2025 Tax Guide – PwC Portugal

PIT taxable persons

Persons covered by PIT and respective taxation

Taxable person	Taxation
Residents	Liable to pay PIT on Portuguese sourced income.
Non Habitual Residents ^(*)	Liable to pay PIT, at a flat rate of 20%, on income derived from the net employment salary and any self-employment income from "high value-added activities". Foreign-sourced income may be exempt, under specific conditions (pensions may be taxed at a 10% rate).
Residents under the Tax Incentive Scheme for Scientific Research and Innovation (IFICI)	They are taxed at a special rate of 20% on the net income from dependent work (category A) and business and professional income (category B) arising from certain activities. As a rule, foreign-sourced income is exempt with the exception of pension and income sourced in "blacklisted" countries.
Former tax residents	Relief from taxation on 50%^(**) of employment and business and professional income. Other income is subject to taxation under the applicable general rules.
Non residents	Liable to pay PIT on Portuguese sourced income.

(*) The Non-Habitual Residents (RNH) regime was revoked effective as from 1 January 2024. However, the regime is still applicable to those who:

(i) were already registered as RNH w up to 1 January 2024; or
(ii) that by 31 December 2023 met the conditions to be registered as RNH. The regime is also applicable to individuals who become tax residents until 31 December 2024 provided certain conditions are met.

(**) With a limit for those who become tax residents as from1 January 2024.

PIT categories of income

Category	Type of income
Category A	Employment income
Category B	Business and professional income
Category E	Investment income
Category F	Rental income
Category G	Capital gains
Category H	Pensions

Simplified regime

Taxpayers covered
Taxpayers whose annual gross income in Category B (business and professional income) does not exceed € 200,000, and have not opted for an organized accounts regime can apply for the simplified regime.

Taxable income
The taxable income under the simplified regime will be calculated by applying the following coefficients to the gross income:

In case of services listed in Article 151 of the PIT Code (coefficient of 0.75) and other services not specifically listed (coefficient of 0.35), the taxable income is assessed differently: the above coefficients are added to the positive difference between 15% of the gross income and the sum of a set of pre-established expenses, incurred with the acquisition of goods and services related with the activity developed and communicated to the tax authorities.

Accordingly, the application of the referred coefficients is partially dependent on a verification of the expenses effectively incurred by the taxpayer. Notwithstanding the eligible expenses effectively incurred, the legislation states that, a deduction of a fixed amount of € 4,462.15 or, if higher, of the total amount of the social security contributions paid is allowed (for the amount not exceeding 10% of the gross income provided that these were not deducted already).

Income	Coefficient (%)
Sale of goods and products, operations with crypto assets, with the exception income deriving from crypto asset mining, as well as provisions of services in the hospitality, food and beverage sector, except those related to local accommodation establishments	0.15
Services related to local housing located in containment areas (apartments and villas)	0.5
Listed service-rendering activities (Article 151 of the PIT Code)	0.75
Other services	0.35
Income from crypto asset mining , contracts which purpose is the transfer or temporary transfer of the use of intellectual or industrial property, or the provision of information related with know-how in the industrial, commercial or scientific sector. Investment income from activities that generated business and professional income. Positive income from real estate. Positive balance of capital gains and capital losses and other increases in wealth.	0.95
Non business-related subsidies	0.30
Other business related subsidies and remaining income under Category B	0.10
Income from services rendered by a shareholder of a company subject to the tax transparency regime	1
Income arising from services rendered to an entity in which, for more than 183 days in a given tax year: - the taxpayer holds, directly or indirectly, at least 5% of the respective share capital or of the voting rights; - the taxpayer, its spouse or “de facto” spouse, and their ascendants and descendants hold, as a group, directly or indirectly, at least 25% of the respective share capital or of the voting rights.	1
First time installation grants for young farmers	0.10

Practical example
A taxpayer earning a total gross income of € 40,000 derived from the rendering of services (listed in Article 151 of the PIT Code) and incurring expenses in the amount of at least € 1,537.85, can benefit from the coefficient in full, i.e. 75%.

Gross Income Applicable coefficient Taxable income		€ 40,000 75% € 30,000
Validation of the application of the coefficient:
15% of Gross Income		€ 6,000
(-)	Specific deduction	€ 4,462.15
(-)	Deductible expenses effectively incurred	€ 1,537.85
(=)	Difference between 15% of gross income and the amount of deductible expenses	€ 0

PIT Taxation

Taxation of income, subventions and allowances

Description		PIT Taxation	PIT Exemption
Salaries, holidays and Christmas allowances, commissions		x	–
Members of statutory board		x	–
Cash shortage allowance		–	Up to 5% of the monthly salary
Daily allowance in Portugal	Directors Others	– –	Up to € 72.65/day Up to € 65.85/day
Daily allowance for travels abroad	Directors Others	– –	Up to € 167.07/day Up to € 148.91/day
Mileage allowance (own car)		–	Up to € 0.40/Km
Company car – acquisition/private use		x ⁽¹⁾	–
Loans granted by the employer – acquisition of permanent private house		x	(≤ €180,426.40 ) and (rate≥ 70% x ECB rate)
Loans granted by other entity in which the employer bears an interest (totally or partly)		x	–
Loans granted by the employer – other purpose		x	Interest rate ≥ reference rate
Productivity and performance bonuses, profit sharing, and profit distribution		–	In 2025, productivity and performance bonuses, profit sharing and profit distributions, which are granted voluntarily and not regularly are exempt from PIT up to the limit of 6% of the annual base salary of the employee, provided that there is a salary increase eligible for purposes of the article 19. B of the Portuguese Tax Incentives Statue Code.
Indemnity for the termination of the employment contract		–	Up to (average of the regular salary of the last 12 months)* years of work ⁽²⁾
Share purchase plans		x	-
Early retirement		x	–
Lunch allowance		–	Up to € 6.00/day
Meal vouchers		–	Up to € 10.20/day
Child expenses vouchers		–	x
Education voucher		x	–
Allowance for house rental		x	–
Availability of housing by the employer		–	Capped at the limit of the value of the rents foreseen in the Programme to Support Rental (“Programa de Apoio ao Arrendamento”)

(1) The benefit obtained from the private use of a company car is only liable to taxation when there is a written agreement on the matter.
(2) Managers, board members, directors of companies, public managers or representatives of permanent establishments in Portugal of non resident entities: the amount received for the termination of the employment contract is fully taxable, but only the value relative to the exercise of those functions.

Remark:
As of 1 January 2025, the monthly minimum wage is € 870.

PIT rates

PIT brackets in 2025

Taxable income (€)	Rate (%)	Deductible amount (€)
Up to 8,059	13	–
+ 8,059 up to 12,160	16.5	282.07
+ 12,160 up to 17,233	22	950.91
+ 17,233 up to 22,306	25	1,467.91
+ 22,306 up to 28,400	32	3,029.38
+ 28,400 up to 41,629	35.5	4,023.14
+ 41,629 up to 44,987	43.5	7,353.76
+ 44,987 up to 83,696	45	8,028.38
Above 83,696	48	10,539.00

Taxable income (€)	Rate (%)	Deductible amount (€)
Up to 7,703	9.1	–
+ 7,703 up to 11,623	11.55	188.72
+ 11,623 up to 16,472	15.4	636.24
+ 16,472 up to 21,321	17.5	982.06
+ 21,321 up to 27,146	22.4	2,026.77
+ 27,146 up to 39,791	32.31	4,716.89
+ 39,791 up to 43,000	42.2	8,652.95
+ 43,000 up to 80,000	43.65	9,276.82
Above 80,000	47.52	12,372.80

Taxable income (€)	Rate (%)	Deductible amount (€)
Up to 8,059	9.1	-
+ 8,059 up to 12,160	11.55	197.45
+ 12,160 up to 17,233	15.40	665.64
+ 17,233 up to 22,306	17.50	1,027.53
+ 22,306 up to 28,400	22.40	2,120.56
+ 28,400 up to 41,629	24.85	2,816.20
+ 41,629 up to 44,987	30.45	5,147.63
+ 44,987 up to 83,696	31.5	5,619.87
Above 83,696	33.6	7,377.30

Additional solidarity rate

The Additional Solidarity Tax must be added to the marginal IRS rate, which varies between 2.5% for income between € 80,000 and € 250,000 and 5% for income above € 250,000. The additional solidarity levy was introduced in 2013 and has remained unchanged for the past 10 years.

Taxable income (€)	Rate Mainland and Madeira	Rate Azores
80.000 up to 250.000	2,5%	1,75%
Above 250.000	5%	3,5%

Taxable income (€)

Rate

Mainland and Madeira

Rate

Azores

80.000 up to 250.000

2,5%

1,75%

Above 250.000

5%

3,5%

Withholding tax rates | Final tax rates | Special tax rates – Residents and non residents

Income		Category	Residents		Non residents
			Rates (%)	Note	Rates (%)	Note
Employment income		A	0 up to 47.17 ⁽¹⁾	WTA	25 ⁽²⁾	FR
Remuneration of board members		A	0 up to 47,17	WTA	25⁽²⁾	FR
Commissions		B	25	WTA	25	FR
Rendering of services		B	11.5/23	WTA	25 ⁽²⁾	FR
Royalties earned by the author/original owner		B	16.5	WTA	25	FR
Royalties earned by the non original author/ technical assistance		E	28	FTW^{(3) (4)}	25	FR
Lease of equipment		E	16,5	WTA ^{(3) (4)}	25	FR
Dividends		E	28	FTW ^{(3) (4) (5) (6)}	28	FR ⁽⁵⁾
Interest from bank deposits		E	28	FTW^{(3) (4) (5) (6)}	28	FR⁽⁵⁾
Interest on shareholders’ loans		E	28	FTW ^{(3) (4) (5) (6)}	28	FR ⁽⁵⁾
Interest from debt securities		E	28	FTW ^{(3) (4) (5) (6)}	28	FR ⁽⁵⁾
Other investment income		E	28	FTW^{(3) (4) (5) (6)}	28	FR ⁽⁵⁾
Rental income		F	25	WTA ^{(13) (14) (16)}	25	WTA^{(13) (14)}
Capital gains:	Disposal of shares	G	28	^{(7) (10) (11) (16)}	28	^{(7) (11)}
Capital gains:	Disposal of real estate	G	14.5 up to 48	^{(8) (15)}	14.5 up to 48	– ^{(9) (12) (15)}
Pensions		H	0 up to 53	WTA	25	FR

FR: Flat rate

WTA: Withholding Tax on Account of the final tax payment

FTW: Final Tax Withholding

(1) The monthly withholding taxes shall be determined by applying a marginal rate on the monthly remuneration and subsequently a deduction. The computation shall also consider an additional deduction of a fixed amount per dependent.

(2) Employment and self-employment income paid to non-resident individuals as a result of services provided to a single entity, is not liable to withholding taxes, up to the amount corresponding to the monthly minimum wage.

(3) Taxed autonomously at a rate of 28% if paid by non-resident entities, and not subject to withholding tax.

(4) Investment income obtained by non-resident entities, without a permanent establishment in Portugal, and resident in countries, territories and regions that provide a favorable tax regime under Portuguese tax law (without a permanent establishment in Portugal), is subject to a tax rate of 35%.

(5) Income paid or made available to bank accounts opened in the name of one or more holders acting on behalf of one or more unidentified third parties, is subject to a final tax rate of 35%, unless the beneficial owner of the income is identified.

(6) Income received by residents in the Portuguese territory, and paid, or made available by a third party on behalf of non-resident entities domiciled in a more favorable tax regime, is subject to a tax rate of 35%.

(7) Subject to taxation at an autonomous rate of 28%.

(8) May be exempt from taxation, provided that the sales proceeds are reinvested in the acquisition of a primary private residence or in the acquisition of a financial product (e.g., life insurance / pension plan), under certain conditions established in the tax legislation.

(9) Capital gains obtained by non-resident entities, without a permanent establishment in Portugal, who are domiciled in countries, territories and regions that provide a favorable tax regime under Portuguese tax law , are subject to a tax rate of 35%.

(10) Capital gains arising on the sale of shares and other securities - the balance between capital gains/capital losses will mandatorily be aggregated if:

- The assets are held for less than 365 days and

- The taxable income of the taxpayer considering the balance of said capital gains and capital losses amount to € 83,696 or exceeds that amount.

This rule also applies to the balance between capital gains and capital losses subject to the aggravated rate of 35% (country, territory or region subject to a more favorable tax regime).

(11) subject to a flat rate of 35% if related to the redemption of bonds and other securities, or to the redemption of units in investment funds or their liquidation, issued by a non resident without a permanent establishment in Portugal domiciled in a country, territory or region subject to a more favorable tax regime under Portuguese tax law.

(12) The positive balance arising on the transfer for a consideration of rights in real estate, obtained by non-tax residents, is subject to taxation on 50% of its amount. All income earned, including those obtained outside the national territory, will be considered for the purposes of determining the rate to be applied to said balance.

(13) The effective autonomous taxation rate is respectively 25% or 28% in the case of residential or non residential buildings. The taxable basis and/or the applicable rates may be lower depending on the purposes of the building and/or the duration of the agreements, as per the applicable legal framework.

(14) Real estate income may be excluded from taxation under certain conditions (e.g., income from rental agreements of buildings allocated to residential use and formerly allocated to local lodging).

(15) The following capital gains on transfer for consideration may be excluded/exempt (with progression) from taxation:

- Land for construction or secondary residential buildings, if the sales proceeds are used to settle the outstanding principal amount in a permanent residential loan borrowed by the taxpayer or its descendants.

- Sale of residential buildings to the State, Autonomous Regions or Municipalities.

(16) The positive or negative balance resulting from the disposal of securities admitted to trading or shares in open-ended collective investment undertakings may benefits from a PIT exclusion of 10%, 20%, or 30%, when it results from assets held for a period exceeding 2 years.

Withholding tax rates applicable in 2025

Category A (employment income) and Category H (pensions)

See the Withholding Tax Tables for 2025 for Portugal mainland.Access Information

See the Withholding Tax Tables for 2025 for Madeira.
Access Information

See the Withholding Tax Tables for 2025 for Azores.
Access Information

Deductions on gross income

Category	Deductions
A	€ 4,462.15 or the total amount of the mandatory social security contributions. if higher. This amount can be increased to € 4,702.50, provided that the difference stems from expenses incurred with mandatory fees paid to professional associations which are indispensable to the exercise of the respective activity. Severance payments made by the employee for the termination of an employment contract without prior notice; Trade union fees, up to 1% of the gross income increased by 100%.
B	Simplified regime: taxpayers whose annual gross income in Category B (business and professional income) does not exceed € 200,000 and have not opted for organized accounts regime, are eligible to apply (the deduction will depend on the applicable coefficient). Organized accounts: expenses related to the activities carried out, with some limitations.
F	All the expenses effectively incurred and paid by the taxpayers, excluding financial costs, furniture, households appliances, decoration and comfort accessories, as well as the additional to the Municipal Property Tax (“AIMI"), on account of a deduction to the tax assessed.
G	50% of the positive or negative balance arising from: Sale of real estate (except if arising from the sale of property which benefited from non-refundable support of the State or other public entities); Sale of intellectual or industrial property, or know-how, when obtained by the non-original author; Assignment of position in contracts regarding immovable property: Transfer of shares in micro and small companies non listed in regulated or non regulated stock exchange market (in the case of positive balance).
H	Deduction of € 4,462.15 per taxpayer; Trade union fees, up to 1% of the gross income, increased by 100%; Mandatory contributions to social protection systems and legal health coverage sub-systems, in the part that exceeds € 4,462.15.

PIT deductions

Type of deduction	Married (€)			Unmarried (€)
Personal and family deductions
i) Dependants	600			600
Dependants <= aged 3 years old (households with 1 dependent)	726			726
Dependents <= 6 years old, applicable to the second and following dependents, regardless of the age of the first dependent	900			900
ii) Ascendants living in the same household as the taxpayer, and whose income does not exceed the minimum pension payable under the general regime	525			525
iii) Only one ascendant living in the same household as the taxpayer, whose income does not exceed the minimum pension payable under the general regime	635			635
Deductions for disabled people
i) Per taxpayer	4,180.00 ⁽¹⁾			2,090.00
ii) Per dependant with disability	1,306.25			1,306.25
iii) For each ascendant with disability living in the same household as the taxpayer, and whose income does not exceed the minimum pension payable under the general regime	1,306.25			1,306.25
iv) 30% of education and rehabilitation expenditures	No limit			No limit
v) 25% of life insurance premiums or contributions paid to credit unions	15% of computed tax			15% of computed tax
Age-related retirement contributions	130			65
Disability expenses for each taxpayer and each dependant, whose level of permanent disability is ≥ 90%	2,090.00			2,090.00
Health expenses Deduction of 15% of the following expenses:
a) acquisition of goods and services which are either VAT exempt, or subject to the reduced VAT rate of 6% b) acquisition of other goods and services duly justified by medical prescription c) health insurance premiums or contributions paid to mutualistic associations or non-profit organizations that provide healthcare services The above is valid only for expenses within eligible sectors, and which are communicated to the Portuguese tax authorities through the official website	15% of the expenses, capped at 1,000			15% of the expenses, capped at 1,000
Education and training expenses
i) 30% of the expenses incurred, also considering professional training, capped at	800 ^{(2) (3)}			800 ^{(2) (3)}
ii) 30% of the expenses incurred with rented property, per member of the household, up to 25 years of age, who attends a recognised educational establishment located more than 50 km from the permanent residence of the household	400 ⁽²⁾			400 ⁽²⁾
Retirement homes
25% of the expenses incurred with retirement homes for the taxpayer, disabled persons, its dependants, ascendants and relatives, up to the third degree, whose income does not exceed the minimum monthly wage	403.75			403.75
Alimony
20% of the amount spent	No limit			No limit
Expenses with real estate Deduction of 15% of expenditures related to real estate, namely:
a) rents paid, deducted from any subsidies or official contributions, concerning an urban property or fraction for permanent residence under the Urban Rental Regime or the New Urban Rental Regime (deductions may be increased under certain conditions)	700 ^{(4) (5)}			700 ^{(4) (5)}
b) amounts incurred related to time sharing (in the year that such income is taxed at the level of the owner)	700			700
Retirement Savings Funds and Retirement Savings Plans Tax credit of 20% of the amount invested:
i) people under 35 years old		800			400
ii) people between 35 and 50 years old		700			350
iii) people above 50 years old		600			300
Donations Tax credit of 25% of the amount of the donations to⁽⁶⁾:
i) central, regional or local administration; foundations (under certain conditions)		No limit			No limit
ii) other entities		15% of the tax assessed			15% of the tax assessed
Deduction of VAT incurred
Deduction of 15% of the VAT incurred by any household member, regarding certain provisions of services.⁽⁷⁾ Deduction of 35% of the VAT incurred by any household member, with the acquisition of veterinary medicine. Deduction of 100% of the VAT incurred by any household member on monthly passes or tickets for the use of public transportation, in both cases if included on invoices communicated to the tax authorities. Deduction of 100% of the VAT incurred by any household member on subscriptions to periodical publications, if included on invoices communicated to the tax authorities. Deduction of 30% of VAT borne by any member of the household that refers to invoices certifying services provided and that are issued by entities with activity code (CAE) for sports and recreational education, sports club activities and gym-fitness activities.		250			250
Deduction of costs related with remuneration for the provision of domestic work
Deduction of 5% of the amount borne by any member of the household as remuneration for the provision of domestic work		200			200
Family general expenses
Deduction of 35% of the amount of expenses incurred by any member of the household with the acquisition of goods and services, communicated to the Portuguese tax authorities, provided that the taxpayer number is included in the invoice		500			250
Deduction of 45% of the amount incurred by any member of the household of a single-parent taxpayers					335
Limitation on deductions and tax benefits Limitation on the aggregate deductions ⁽⁸⁾:
Taxable income up to € 8,059			No limit
Taxable income above € 80,000 ⁽⁹⁾			1,000

(1) Assuming that both taxpayers are disabled.

(2) If the expenses mentioned occur simultaneously in i) and ii), the limit is € 1,100 instead of € 800.

(3) The amount of the education and training expenses incurred by students attending education institutions located in inland regions ( as identified in Decree 208/2017 of 13 July), shall be increased by 10%. In addition, the overall cap of the tax deduction for education and training expenses shall be increased from € 800 to € 1,000, if the difference relates to the said expenses.

(4) The limit is increased to the following amounts, being the taxable income, in the case of joint taxation, the amount that results from the application of the divisor foreseen in Article 69 of the PIT Code:

1. For taxpayers who have a taxable income equal to or lower than the amount from the first bracket of paragraph 1 of article 68, an amount of € 1,100;

2. For taxpayers who have a taxable income greater than the value of the first bracket of paragraph 1 of Article 68 and equal to or lower than € 30,000, the limit resulting from the application of the following formula: € 700 + [€ 1,100 - € 700 ) x [(€ 30,000 - taxable Income)/(€ 30,000 -value of the first bracket)]]

(5) This limit is increased to € 1,000 for 3 years (the first year being the one of conclusion of the contract), if these expenses derive from the transfer of permanent residence to an inland territory (as defined in Decree 208/2017 of 13 July).

(6) A taxpayer granting donations of an amount exceeding € 50,000 (i) which respective tax liability in the year concerned is lower than the amount of the allowed deduction or (ii) that reaches the cap of the deduction (15% of the tax liability), can carry the amount of the deduction forward for the following three years, capped at 10% the tax liability in each of the tax years concerned.

(7) The deduction is allowed in respect to expenses incurred with the following services:

- Maintenance and repair of motor vehicles;

- Maintenance and repair of motorcycles and related parts and accessories;

- Accommodation and food service activities;

- Hairdressers and beauty salons;

- Veterinarian expenses including medicines.

(8) Includes health and insurance expenses, education and training expenditures, retirement home fees, deduction for requesting the issuance of an invoice, costs with immovable property, alimony expenses and tax benefits. In households with three or more dependents, the above limits are increased by 5% per dependent or civil godson, which is not a taxpayer.
(9) For the remaining cases, the global limit is determined based on the following formula:
€ 1,000 + [(€ 2,500 - € 1,000) * [(€ 80,000 - taxable income) / (€ 80,000 - € 8,059)]]

Computation of PIT

📁
Simulate your PIT liability using PwC’s simulations.

How to calculate PIT?
(-)	Gross income of each category Deductions on gross income
(=)	Net income of each category
(-)	Deductions of losses
(=)	Taxable income
(÷) (x) (-) (x)	Family quotient (1 or 2) PIT rate and additional solidarity rate Deductions Family quotient
(=)	PIT assessed
(-)	Tax deductions (including tax benefits)
(=)	Tax liability
(-)	Withholding tax + Payments on account
(=)	PIT (payable/to be refunded)

PIT benefits

Non-habitual residents

Taxation

Employment and self-employment income, derived from “high value-added activities of a scientific, artistic or technical nature” (included in a list of activities published by the Portuguese Government), received by non-habitual residents in Portugal is subject to a special tax rate of 20%.

Additionally, the regime also establishes a tax exemption for foreign-sourced income, such as employment income, self-employment income, rental income, interest, dividends as well as other investment income, under specific conditions.

Foreign source pensions (and similar income) are subject to a fixed rate of 10%.

The regime is applicable for a period of ten consecutive years.

Conditions

The regime applies to individuals who become Portuguese tax residents, under Portuguese domestic law, in a specific year and have not qualified as tax residents in Portugal in any of the previous five years.

Note: The Non-Habitual Residents (RNH) regime was revoked with effectiveness to 1 January 2024 onward. However, the regime is still applicable to those who (i) ware already registered as RNH on 1 January 1, 2024 or (ii) that by 31 December 31, 2023, meet the conditions for registration as RNH.

The regime is also applicable to individuals who become tax residents until 31 December 2024 provided certain conditions are met.

Specificities

The status of non-habitual tax resident becomes effective upon registration with the Portuguese tax authorities. Application should be filed until the 31st March of the year following that which the taxpayer becomes tax resident in Portugal.

Tax Incentive Scheme for Scientific Research and Innovation (IFICI)

Taxation

The regime shall provide for:

A special 20% rate on net employment income (category A) and business and professional income (category B) from the activities identified in the applicable legislation.
As a rule, an exemption on foreign sourced employment income, business and professional income, investment income, rental income and capital gains.

Conditions

The regime applies to individuals who:

(i) become Portuguese tax residents, under Portuguese domestic law, in a specific year;
(ii) have not qualified as tax residents in Portugal in any of the previous five years;
(iii) do not benefit or have benefited from the RNH regime or the former resident regime;
and
(iv) who carry out activities provided for in the applicable legislation.

Tax regime for former tax residents

Taxation

50% relief from taxation on employment and self employment/business income.

For those who become tax residents from 1 January 2024 onward, the relief is capped at € 250,000.

Conditions

The regime applies to taxpayers that became or become resident in the Portuguese territory from the years 2019 to 2026 provided that:

- They were not resident in the Portuguese territory in any of the 5 prior years.
- Have been resident in the Portuguese territory at any time before the referred five year period.;
- Have their tax situation regularized.

The regime applies for 5 years, including the year of return.

Youth Personal Income Tax (“IRS Jovem”)

Income from Category A (employment income) and Category B (self employment/business income) earned by taxpayers who are up to 35 years old who are not dependents, is partially exempt from PIT, in the first ten years earning employment or self-employment income.

The exemption applicable corresponds to 100% of the income earned in the first year, 75% in the second, third and fourth years, 50% in the fifth, sixth and seventh years and 25% in the eighth, ninth and tenth years, capped at 55 x Social Support Index (IAS).

A transitional regime has been created which establishes that, for purposes of exemption, taxpayers are included in the percentage corresponding to the year following the number 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.

Share plans or equivalent rights

Gains derived from share plans or equivalent rights created by the employer for the benefit of the employees may be taxed at only 50% of their value at the rate of 28%, provided certain conditions are met.

Intellectual property

Author rights obtained by a Portuguese tax resident who is the respective original owner, benefit from a 50% tax relief. However, the amount excluded from taxation is capped at € 10,000.

Venture capital funds

Capital gains derived from the sale of participation units are taxed at a 10% rate.

Collective investment vehicles in forest resources

Capital gains derived from the sale of participation units in real estate investment funds, or shares in real estate investment companies in forest resources, are taxed at a 10% rate.

Capital gains realized by non residents

An tax exemption applies to the disposal of:

shares, other securities and autonomous warrants issued by Portuguese tax resident companies;
derivatives negotiated at a regulated stock exchange;
participation units in venture capital funds.

Exceptions:

residents in countries, territories and regions that provide a favorable tax regime under Portuguese tax law;
disposal of shares in companies whose assets comprise more than 50% of real estate located in Portugal.

Employer contributions to social security regimes

Employers' contributions to pension funds (or other complementary social security regimes) are PIT exempt at the moment of the contribution, provided certain requirements are met.

Sportsmen

Prizes and awards granted to disabled athletes, high performance athletes and their coaches are tax exempt, as long as granted by one of the entities referred to in the legislation.
Sports training grants awarded to non-professional sports agents (players, referees, judges) are tax exempt, up to € 2,375, provided that certain conditions are met.
Compensations paid to non-professional referees and umpires are excluded from taxation, up to € 2,375, provided that certain conditions are met.

“Programa Semente” / Start-ups

This tax benefit is applicable to individuals making eligible investment under “Programa Semente”, allowing a PIT credit of 25% of the eligible investment. This investment is limited to shareholdings not exceeding 30% of the share capital or of the voting rights. It should be represented by cash contributions actually paid, and, among other requirements, the annual amount of the eligible investment cannot exceed € 100,000.00 per taxable person.

_{The contents presented are of a general and purely informative nature, not intended for any particular entity or situation, and do not replace obtaining appropriate professional advice for specific cases. PwC makes every effort to keep the 2025 Tax Guide updated; however, it cannot guarantee its up-to-date status at all times.}

^{© 2025 PwC. This communication is of an informative nature and intended for general purposes only. It does not address any particular person or entity nor does it relate to any specific situation or circumstance. PricewaterhouseCoopers Tax Services TLS, Lda. We will not accept any responsibility arising from reliance on information hereby transmitted, which is not intended to be a substitute for specific professional business advice.}

2025 Tax Guide – PIT

PIT taxable persons

Persons covered by PIT and respective taxation

(*) The Non-Habitual Residents (RNH) regime was revoked effective as from 1 January 2024. However, the regime is still applicable to those who:

(i) were already registered as RNH w up to 1 January 2024; or (ii) that by 31 December 2023 met the conditions to be registered as RNH. The regime is also applicable to individuals who become tax residents until 31 December 2024 provided certain conditions are met.

(**) With a limit for those who become tax residents as from1 January 2024.

PIT categories of income

Simplified regime

Practical example A taxpayer earning a total gross income of € 40,000 derived from the rendering of services (listed in Article 151 of the PIT Code) and incurring expenses in the amount of at least € 1,537.85, can benefit from the coefficient in full, i.e. 75%.

Gross Income

Applicable coefficient

Taxable income

€ 40,000 75% € 30,000

Validation of the application of the coefficient:

15% of Gross Income

€ 6,000

(-)

Specific deduction

€ 4,462.15

(-)

Deductible expenses effectively incurred

€ 1,537.85

(=)

Difference between 15% of gross income and the amount of deductible expenses

€ 0

PIT Taxation

Taxation of income, subventions and allowances

Remark: As of 1 January 2025, the monthly minimum wage is € 870.

PIT rates

PIT brackets in 2025

Additional solidarity rate

Withholding tax rates | Final tax rates | Special tax rates – Residents and non residents

FR: Flat rate

WTA: Withholding Tax on Account of the final tax payment

FTW: Final Tax Withholding

(1) The monthly withholding taxes shall be determined by applying a marginal rate on the monthly remuneration and subsequently a deduction. The computation shall also consider an additional deduction of a fixed amount per dependent.

(2) Employment and self-employment income paid to non-resident individuals as a result of services provided to a single entity, is not liable to withholding taxes, up to the amount corresponding to the monthly minimum wage.

(3) Taxed autonomously at a rate of 28% if paid by non-resident entities, and not subject to withholding tax.

(4) Investment income obtained by non-resident entities, without a permanent establishment in Portugal, and resident in countries, territories and regions that provide a favorable tax regime under Portuguese tax law (without a permanent establishment in Portugal), is subject to a tax rate of 35%.

(5) Income paid or made available to bank accounts opened in the name of one or more holders acting on behalf of one or more unidentified third parties, is subject to a final tax rate of 35%, unless the beneficial owner of the income is identified.

(6) Income received by residents in the Portuguese territory, and paid, or made available by a third party on behalf of non-resident entities domiciled in a more favorable tax regime, is subject to a tax rate of 35%.

(7) Subject to taxation at an autonomous rate of 28%.

(8) May be exempt from taxation, provided that the sales proceeds are reinvested in the acquisition of a primary private residence or in the acquisition of a financial product (e.g., life insurance / pension plan), under certain conditions established in the tax legislation.

(9) Capital gains obtained by non-resident entities, without a permanent establishment in Portugal, who are domiciled in countries, territories and regions that provide a favorable tax regime under Portuguese tax law , are subject to a tax rate of 35%.

(10) Capital gains arising on the sale of shares and other securities - the balance between capital gains/capital losses will mandatorily be aggregated if:

- The assets are held for less than 365 days and

- The taxable income of the taxpayer considering the balance of said capital gains and capital losses amount to € 83,696 or exceeds that amount.

This rule also applies to the balance between capital gains and capital losses subject to the aggravated rate of 35% (country, territory or region subject to a more favorable tax regime).

(14) Real estate income may be excluded from taxation under certain conditions (e.g., income from rental agreements of buildings allocated to residential use and formerly allocated to local lodging).

(15) The following capital gains on transfer for consideration may be excluded/exempt (with progression) from taxation:

- Land for construction or secondary residential buildings, if the sales proceeds are used to settle the outstanding principal amount in a permanent residential loan borrowed by the taxpayer or its descendants.

- Sale of residential buildings to the State, Autonomous Regions or Municipalities.

(16) The positive or negative balance resulting from the disposal of securities admitted to trading or shares in open-ended collective investment undertakings may benefits from a PIT exclusion of 10%, 20%, or 30%, when it results from assets held for a period exceeding 2 years.

Withholding tax rates applicable in 2025

Category A (employment income) and Category H (pensions)

Deductions on gross income

PIT deductions

The above is valid only for expenses within eligible sectors, and which are communicated to the Portuguese tax authorities through the official website

(1) Assuming that both taxpayers are disabled.

(2) If the expenses mentioned occur simultaneously in i) and ii), the limit is € 1,100 instead of € 800.

(4) The limit is increased to the following amounts, being the taxable income, in the case of joint taxation, the amount that results from the application of the divisor foreseen in Article 69 of the PIT Code:

1. For taxpayers who have a taxable income equal to or lower than the amount from the first bracket of paragraph 1 of article 68, an amount of € 1,100;

(5) This limit is increased to € 1,000 for 3 years (the first year being the one of conclusion of the contract), if these expenses derive from the transfer of permanent residence to an inland territory (as defined in Decree 208/2017 of 13 July).

(7) The deduction is allowed in respect to expenses incurred with the following services:

- Maintenance and repair of motor vehicles;

- Maintenance and repair of motorcycles and related parts and accessories;

- Accommodation and food service activities;

- Hairdressers and beauty salons;

- Veterinarian expenses including medicines.

Computation of PIT

📁 Simulate your PIT liability using PwC’s simulations.

PIT benefits

Non-habitual residents

Note: The Non-Habitual Residents (RNH) regime was revoked with effectiveness to 1 January 2024 onward. However, the regime is still applicable to those who (i) ware already registered as RNH on 1 January 1, 2024 or (ii) that by 31 December 31, 2023, meet the conditions for registration as RNH.

The regime is also applicable to individuals who become tax residents until 31 December 2024 provided certain conditions are met.

Tax Incentive Scheme for Scientific Research and Innovation (IFICI)

Tax regime for former tax residents

Youth Personal Income Tax (“IRS Jovem”)

Share plans or equivalent rights

Intellectual property

(i) were already registered as RNH w up to 1 January 2024; or
(ii) that by 31 December 2023 met the conditions to be registered as RNH. The regime is also applicable to individuals who become tax residents until 31 December 2024 provided certain conditions are met.

Practical example
A taxpayer earning a total gross income of € 40,000 derived from the rendering of services (listed in Article 151 of the PIT Code) and incurring expenses in the amount of at least € 1,537.85, can benefit from the coefficient in full, i.e. 75%.

€ 40,000
75%
€ 30,000

Remark:
As of 1 January 2025, the monthly minimum wage is € 870.

📁
Simulate your PIT liability using PwC’s simulations.