Portugal
Southern Europe • UTC+1 • Europe/LisbonPersonal Income Tax (IRS)
Portugal applies a progressive personal income tax system (IRS) for residents, with rates ranging from 13.25% to 48% depending on annual income. Additional solidarity surcharges may apply to high-income earners. Non-residents are typically taxed at a flat 25% rate on Portuguese-source income.
Nomad Visa
Available
D7/D8 visa
VAT / GST
23% / 22% / 18%
Standard VAT rate
Corporate Tax
20% / 14%
Standard corporate tax rate
Income Tax
14.5% – 48%
Solidarity surcharge applies
Tax System Overview
Portugal has a progressive tax system where residents are taxed on worldwide income and non-residents are taxed only on Portuguese-source income. The system includes major taxes such as Personal Income Tax (IRS), Corporate Tax (IRC), VAT (IVA), and property taxes.
System Type
Progressive personal income tax (IRS)
Resident Taxation
Taxed on worldwide income.
Non-Resident Taxation
Flat 25% tax on Portuguese-source employment income.
Tax Year
January 1 – December 31
Income Tax Bands
Portugal’s progressive IRS income tax bands based on annual taxable income thresholds.
Tax Treaty
Double Taxation Agreements reduce withholding taxes and avoid double taxation on income from foreign sources.
United States of America
Treaty ActivePortugal and the United States have a double taxation treaty that prevents individuals and businesses from being taxed twice on the same income, reduces withholding taxes on dividends, interest, and royalties, and clarifies tax residency rules.
Key Benefits
Prevents double taxation on income earned in both countries.- Reduced withholding tax on dividends, interest, and royalties.
- Clarifies tax residency to determine where taxes should be paid.
- Provides relief for pensions and certain social security benefits.
Totalization Agreement
These agreements coordinate social security systems, ensuring workers pay into only one system at a time and can claim benefits based on combined contributions.
United States of America
Agreement ActivePortugal and the US have a social security totalization agreement that prevents workers from paying social security in both countries simultaneously and allows combining contribution periods to qualify for benefits.
Coverage Areas
Facts
- Prevents double taxation of social security contributions for US–Portugal workers.
- Allows workers who split careers between the two countries to combine contribution periods to meet eligibility requirements.
- Applies to employees, self-employed, and certain government workers.
Other Countries with Agreements
Canada
Germany
France
Business & Freelancing
Corporate Tax Rate
20% (Mainland), 14% in Madeira and 14% in Azores
VAT Registration
Mandatory if annual turnover exceeds €13,500 under the small-business exemption regime (Regime de Isenção – Article 53 VAT Code).
Freelancer Rules
Self-employed workers can use the simplified tax regime if annual revenue ≤ €200,000.
Incentives
Madeira International Business Centre allows qualifying companies to benefit from a 5% corporate tax rate until 31 December 2028.
Crypto Policy
Crypto capital gains are taxed at 28% if the asset is held less than 365 days; gains from assets held longer than 365 days are tax-exempt for individuals.
Frequently Asked Questions
Digital Nomad & Benefits
Visa Details
Tax Perks
- Under the Non‑Habitual Resident (NHR) regime, new residents may receive flat 20% tax on certain Portuguese income and potential tax exemptions on foreign‑sourced income for 10 years.
- Foreign pension income may be taxed at a reduced flat rate of 10% under NHR, lower than standard IRS rates.
- No wealth tax on overall net assets; only high‑value Portuguese real estate (AIMI) is taxed.
- Capital gains from foreign assets may be exempt if conditions under NHR and treaty rules are met.
Filing Roadmap
Obtain Tax Number (NIF)
Register with the Portuguese tax authority and obtain a NIF (Número de Identificação Fiscal) before filing taxes.
Register Economic Activity
If self-employed or freelancing, register your professional activity with the tax authority.
Submit IRS Tax Return
File the Modelo 3 IRS declaration online between April 1 and June 30 for the previous tax year.
Pay Tax Due
Settle any outstanding tax liability after assessment, usually by August 31.