Taxes

Taxes in Portugal

Portuguese tax law is complex, and your obligations depend on your residency status, income sources, and whether you qualify for any special regimes.

Tax Residency

You become Portuguese tax resident if you:

• Spend 183+ days in Portugal during a calendar year, OR
• Have a permanent home in Portugal available for your use

Tax residents: Pay tax on worldwide income

Non-residents: Pay tax only on Portuguese-source income

Income Tax Rates (IRS) 2026

Progressive rates for employment/self-employment income:

Plus solidarity surcharges for highest incomes.

NHR Regime (Ended)

Important: The Non-Habitual Resident (NHR) regime ended for new applicants as of January 2024. This popular program offered:

• 20% flat rate on Portuguese employment income in qualifying activities
• Exemption on most foreign-source income
• 10 years duration

Those who qualified before 2024 continue to benefit.

IFICI (NHR 2.0)

The replacement "Tax Incentive for Scientific Research and Innovation" (IFICI) is much more limited:

• Only for highly qualified professionals in scientific research and innovation
• 20% flat tax rate on Portuguese income
• Previous NHR beneficiaries are ineligible

Most expats will not qualify for IFICI.

Self-Employment & Freelancing

Simplified regime (most freelancers):

• Income up to €200,000
• 75% of income taxed at normal rates (effective 25% exemption)
• Quarterly VAT (IVA) obligations if exceeding €13,500
• Social security: 21.4% of 70% of income

Social Security

Employees: Split between employer and employee

Self-employed: Approximately 21.4% of 70% of income

Voluntary coverage: Available for some visa holders

Property Taxes

• IMI (annual property tax): 0.3-0.45% of tax value
• IMT (transfer tax on purchase): 0-8% depending on value
• Stamp duty: 0.8%

Key Filing Dates

• Tax year: Calendar year
• Filing deadline: April-June (varies)
• Payment: After assessment

Important Considerations

1. Moving money: Large transfers may attract attention. Keep documentation.
2. Exit tax: May apply if you leave Portugal with significant gains
3. Double taxation treaties: Portugal has treaties with many countries
4. Professional advice: Essential for anything complex

For Digital Nomads

Your tax situation depends on:

• Where you're tax resident
• Source of income
• Business structure
• Days spent in Portugal

Many digital nomads structure their affairs through foreign companies or carefully manage their days to avoid Portuguese tax residency. This is a gray area - professional advice is strongly recommended.