Portuguese Guide to Tax

The Portuguese tax system is among the most generous in the European Union and, combined with Portugal’s many other attractions, it has turned the country into one of the most popular destinations worldwide for expats and other investors. With careful planning, you can make the most of tax-efficient opportunities when moving to Portugal or buying Portuguese property. The principle taxes that make up the Portuguese tax system are as follows:

• Personal Income Tax – ‘Imposto sobre o rendimento das pessoas singulares’, generally abbreviated to ‘IRS’
• Corporate Income Tax – ‘Imposto sobre a rendimento das pessoas colectivas’ (IRC)
• Local Property Tax – ‘Imposto Municipal sobre Imóveis’ (IMI) and ‘Adicional Imposto Municipal sobre Imóveis’ (AIMI)
• Property Transfer Tax – ‘Imposto Municipal sobre Transmissôes Onerosas de Imóveis’ (IMT)
• Stamp Duty – ‘Imposto de Selo’
• Capital Gains Tax – ‘Imposto sobre Mais-Valias’
• Value-added Tax – ‘Imposto sobre o Valor Acrescentado’ (IVA)
• Double Tax Agreements (DTAs)
• The tax year in Portugal follows the calendar year and therefore runs from the 1 January to 31 December. Individual tax returns must be submitted between the beginning of May and the end of June in the year following the income arising. Corporate returns must be submitted before the end of May in the year following the income arising.

The Portuguese tax system is based according to six categories of income, as follows:

• Category A – Employment Income
• Category B – Business/Professional Income
• Category E – Investment Income (interest, dividends, royalties)
• Category F – Rental Income
• Category G – Capital Gains
• Category H – Pensions