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Our Tax services
TAXPAYER
NUMBER
Obtaining a Portugal taxpayer ID number (“NIF”) is essential for individuals engaging in transactions subject to registration in Portugal, ranging from acquiring insurance to buying or renting real estate or opening a Portuguese bank account.
TAX
REPRESENTATION
For non-EU residents, obtaining a taxpayer number in Portugal requires the appointment of a resident tax representative under the relevant laws. We serve as the tax representative for non-resident individuals and businesses, aiding them in adhering to Portuguese tax regulations.
TAX
COMPLIANCE
If you are a resident or a non-resident with Portugal-source income not subject to autonomous tax withholding, it is mandatory to file an annual income tax return. Our services encompass accountancy and tax compliance, catering to both individuals and businesses.
BANK
ACCOUNT
When relocating to Portugal, opening a local bank account is often essential. We can streamline this process for you, setting up your account before you arrive in Portugal. Additionally, you can conveniently manage your online account from your home country, ensuring seamless financial access and control.
Portugal Taxation
PERSONAL INCOME TAX
(IRS)
CORPORATE INCOME TAX
(IRC)
PROPERTY TAX
(IMI, AIMI, IMT)
Frequently asked questions about Taxes in Portugal
Do expats pay taxes in Portugal?
Yes, if you are a tax resident in Portugal, you are required to pay taxes on your income. You become a tax resident if you spend more than 183 days in the country or if you have a permanent residence in Portugal. Non-residents are taxed only on income earned within Portugal.
Who is considered a tax resident in Portugal?
An individual is considered a tax resident in Portugal if they spend more than 183 days in the country during a 12-month period or if they have a permanent residence in Portugal at any time during the tax year. Tax residents are taxed on their worldwide income.
When should I file my income tax declaration?
Income tax declarations in Portugal should be filed between April 1 and June 30 for the previous tax year.
Is there an inheritance tax in Portugal?
Portugal does not have an inheritance tax. However, there is a stamp duty on inheritances and gifts, which is usually set at 10%, but this tax does not apply to spouses, descendants, or ascendants.
What is the deadline for paying Personal Tax in Portugal?
The deadline for paying Personal Income Tax (IRS) in Portugal is typically by August 31 of the following year, after filing the tax return between April and June.
Does Portugal tax worldwide income?
Residents in Portugal are taxed on their worldwide income at progressive rates, while non-residents are only taxed on income earned within Portugal, usually at a flat rate. It’s advisable to explore Portugal’s double taxation treaties to avoid being taxed on the same income in multiple countries.
Is Portugal's income tax considered high?
Portugal’s income tax rates can be considered high compared to other countries, with progressive rates ranging from 14.5% to 48%, depending on your income level. However, the NHR regime offers lower tax rates for expats in certain professions.
How do you say income tax in Portuguese?
Income tax in Portuguese is called “Imposto sobre o Rendimento” or “IRS” for individuals.
What is Portugal's tax rate?
Portugal has a progressive income tax rate system, with rates ranging from 14.5% to 48% depending on the individual’s income bracket. There are also additional social security contributions and other taxes depending on the specific circumstances.
What are the Portuguese taxes for expats?
Non-resident expats in Portugal are taxed at a rate of 25% on Portuguese-sourced income. For income earned from interest or dividends, a flat rate of 28% applies to foreign nationals.
What are the progressive tax rates for residents in Portugal?
Portugal’s progressive tax rates for residents range from 14.5% to 48%, depending on income levels. Higher income earners fall into the higher tax brackets.
What is the tax year for Personal Income Tax in Portugal?
The tax year for Personal Income Tax (IRS) in Portugal runs from January 1 to December 31, aligning with the calendar year.
How much tax do you pay in Portugal?
Portugal has a progressive income tax rate ranging from 14.5% to 48% depending on the income level. In addition to income tax, social security contributions and property taxes apply.
Are non-residents taxed differently in Portugal?
Yes, non-residents are taxed only on Portuguese-sourced income. They generally face a flat tax rate of 25% on most income, while interest and dividend income is taxed at a flat rate of 28%.
Are property taxes paid annually in Portugal?
Yes, property taxes, known as IMI (Imposto Municipal sobre Imóveis), are paid annually in Portugal. The tax rate depends on the location and value of the property, typically ranging from 0.3% to 0.8% of the property’s taxable value.
Do US citizens need to pay taxes in Portugal?
Yes, US citizens who are tax residents in Portugal must pay taxes on their worldwide income in Portugal. However, the US and Portugal have a double taxation treaty, which helps prevent double taxation. US citizens are still required to file taxes with the IRS in the United States, even if they live abroad.
Does Portugal have a wealth tax?
Portugal does not have a wealth tax per se, but it does have an additional property tax called AIMI (Adicional ao Imposto Municipal sobre Imóveis) that applies to high-value properties (above €600,000 for individuals).
Can married couples file joint tax returns in Portugal?
Yes, married couples in Portugal can file joint tax returns. This can sometimes result in tax benefits, depending on their combined income.
How is capital gains tax treated in Portugal?
Capital gains tax in Portugal varies depending on the asset type and residency status. For residents, capital gains on the sale of property or investments are taxed at 50% of the gain, and the rates are added to their overall income. Non-residents are taxed at a flat rate of 28% on capital gains.
What are the available tax deductions in Portugal?
Portugal offers various tax deductions, including for health expenses, education, housing, donations, and contributions to pension schemes. Expats under the NHR regime may also benefit from tax exemptions or reduced tax rates on foreign income.
What is the corporate tax rate in Portugal?
The standard corporate tax rate in Portugal is 21% on taxable profits. This rate is slightly below the EU average.
Who is required to pay corporate tax in Portugal?
Corporate tax generally applies to incorporated companies. Self-employed individuals and partnerships pay personal income tax instead.
What is the threshold for VAT registration in Portugal?
If your business turnover exceeds €14,500 per year, you must register for VAT. This threshold will increase to €15,000 in 2025.
Are there any additional surcharges on corporate tax?
Yes, companies may face surcharges, including:
- Up to 1.5% local surcharge (Derrama)
- 3% state surcharge on profits between €1.5 million and €7.5 million
- 5% surcharge on profits between €7.5 million and €35 million
- 9% surcharge on profits over €35 million
What deductions can companies make before calculating taxable profits?
Companies can deduct a variety of expenses, including labor costs, manufacturing costs, marketing, administrative costs, and depreciation.
What is the reduced corporate tax?
Companies can deduct a variety of expenses, including labor costs, manufacturing costs, marketing, administrative costs, and depreciation.
What is the new regime for startups introduced in 2024?
Startups deemed “innovative” can pay a reduced corporate tax rate of 12% on their first €50,000 of profit, provided they have received venture capital financing or investment from the Portuguese Development Bank.
How often do I need to fill the corporate tax return in Portugal?
Businesses must file corporate tax returns annually, usually by the end of May of the following year.
What are the payment schedules for corporate tax?
Corporate tax payments are typically made in three installments, due in July, September, and December, based on the previous year’s tax assessment.
Is there a simplified tax regime for small businesses?
Yes, small businesses with annual turnover under €200,000 can opt for a simplified tax regime, paying tax based on turnover rather than profit.
What is the general VAT rate in Portugal?
The standard VAT rate in Portugal is 23%. There are reduced rates of 13% for certain goods and 6% for essential items.
Are there penalties for late tax filing in Portugal?
Yes, there are significant penalties for late tax filing, including daily interest charges and fines ranging from €45,000 to €165,000, depending on the nature of the delay.
How does the corporate tax system treat non-resident companies?
Non-resident companies are taxed on their Portuguese income that is not subject to personal income tax.
Can companies benefit from corporate tax credits in Portugal?
Yes, companies can access corporate tax credits, including deductions for international double taxation and tax incentives.
What are the tax implications for capital gains on shares in Portugal?
Capital gains from share transfers can be exempt from corporate tax under specific conditions, such as holding shares for at least a year and meeting certain ownership thresholds.
These FAQs provide a clear overview of the corporate tax system in Portugal, addressing common concerns for business owners and investors. If you have any more questions or need further clarification, feel free to ask!
What is the tax year for companies in Portugal?
The corporate tax year in Portugal runs from January 1 to December 31. Companies must align their accounting and tax reporting to this calendar year.
How do companies submit their tax returns in Portugal?
Companies must submit their corporate tax returns online through the self-assessment system provided by the Portuguese Tax Authority, ensuring they meet the deadline typically set for the end of May.
Are there any conditions for tax exemptions related to mergers or share transfers?
Yes, for tax exemptions on capital gains during mergers or share transfers, the shares must be held for at least one year, and the taxpayer must own at least 10% of the shares or voting rights in the transferring entity.
What happens in case of tax fraud in Portugal?
Companies found guilty of tax fraud may face severe penalties, including fines that can range from 30% to 100% of the owed tax, with caps depending on whether the offense was deliberate or due to negligence.
Can companies in Portugal carry forward tax losses?
Yes, businesses can carry forward tax losses to offset future taxable profits for up to 12 years, which can significantly benefit companies looking to recover from a loss-making year.
What are the property taxes for foreigners in Portugal?
Foreigners in Portugal are subject to the same property taxes as Portuguese citizens. These include the IMI (Municipal Property Tax), which ranges from 0.3% to 0.8% of the property’s taxable value, depending on the location and type of property. When buying property, they must pay IMT (Property Transfer Tax), which varies from 1% to 8%, depending on the value and type of property. Additionally, AIMI (Additional Municipal Property Tax) applies to high-value properties, with a rate of 0.4% for individual owners on property values exceeding €600,000, and 0.7% for corporate entities. Rental income is taxed at a flat rate of 28%, while capital gains are taxed at 28% for non-residents.
What taxes do you pay when owning property in Portugal?
When owning property in Portugal, the primary tax you pay is IMI, an annual municipal property tax based on the value of the property. The tax rate varies between 0.3% and 0.8%, depending on the location and type of property.
What taxes do you pay when buying property in Portugal?
When purchasing property in Portugal, you will need to pay IMT (Property Transfer Tax), which ranges from 1% to 8% depending on the property’s value and whether it is a primary or secondary residence. For example, the rate starts at 1% for properties valued up to €92,407 and can go up to 8% for properties exceeding €1,000,000. Additionally, you’ll pay stamp duty, which is a flat 0.8% of the property’s purchase price or tax value, whichever is higher.
What do you need to pay taxes in Portugal?
When filing taxes in Portugal as a foreign resident, you must obtain a Tax Identification Number, called a NIF (Número de Identificação Fiscal or Número de Contribuinte). If you are a non-EU resident, you are also required to appoint a tax representative to could be notified by the Tax Authorities. EU residents do not need a tax representative.
How does property tax in Portugal compare to that in the UK?
Property tax in Portugal can be more favorable compared to the UK, especially for residential properties. While Portugal’s IMI rates range from 0.3% to 0.8%, the UK has Council Tax, which can be higher depending on the property’s band. However, Portugal does impose IMT (Property Transfer Tax) and stamp duty when purchasing property, which are calculated based on the property value.
Is there an inheritance tax on property in Portugal?
Portugal does not have a specific inheritance tax, but there is a stamp duty of 10% on inherited properties. However, this stamp duty does not apply to spouses, children, or parents, who are exempt from paying it.
How much is the rental income tax for property owners in Portugal?
Rental income in Portugal is taxed at a flat rate of 28% for non-residents. For residents, rental income is added to their total income and taxed at progressive rates ranging from 14.5% to 48%. Property owners can deduct expenses such as maintenance and repairs when calculating taxable rental income.
What are the deadlines for paying property taxes in Portugal?
The IMI (Municipal Property Tax) is paid annually. If the total tax amount is €100 or less, it is paid in a single installment in April. If the amount is between €100 and €500, it can be paid in two installments – April and November. For amounts exceeding €500, payment can be made in three installments – April, July, and November.
Additionally, for high-value properties, AIMI (Additional Municipal Property Tax) is also due. AIMI is paid annually in September and applies to properties with a total taxable value above €600,000 for individuals and €1,000,000 for companies.
The IMT (Property Transfer Tax) is a one-time payment due at the time of property acquisition, and it must be paid before the property transfer can be finalized.
How much is the property purchase tax in Portugal?
The property buying tax, known as IMT (Property Transfer Tax), ranges from 1% to 8% depending on the property’s value and whether it’s a primary or secondary residence. The exact rate depends on the property’s location and type.
How much tax do I need to pay when selling property in Portugal?
For residents, capital gains on property sales are taxed at 50% of the gain and added to their overall income. Non-residents are subject to a flat rate of 28% on the total capital gain from the sale of property.
What is IMT (Property Transfer Tax), and when does it need to be paid?
IMT (Imposto Municipal sobre Transmissões Onerosas de Imóveis) is a tax that must be paid when purchasing property in Portugal. The tax is calculated based on the property’s purchase price or its taxable value (VPT), whichever is higher. IMT must be paid before the property transfer can be finalized.
The IMT rate varies depending on the type and value of the property:
- Primary residence: Rates range from 0% to 6%, with the first €97,064 exempt for primary residences.
- Secondary residence: Rates range from 1% to 8%.
- Rural property: Flat rate of 5%.
- Other properties (such as commercial): Flat rate of 6.5%.
For properties over €1,000,000, the IMT rate is 7.5% for primary residences and 8% for secondary or investment properties.
How can I calculate the IMT for a property acquisition in Portugal?
To calculate IMT, you can use the Portuguese government’s online calculator or apply the tax brackets based on the property’s value. The rate varies from 1% to 8% depending on the property’s value and whether it is your primary or secondary residence. You can use this calculator here.
What is IMI (Municipal Property Tax) in Portugal?
IMI (Imposto Municipal sobre Imóveis) is an annual property tax in Portugal, levied on property owners based on the taxable value (VPT) of their property. The IMI tax is paid to the local municipality where the property is located.
The IMI rate depends on the type and location of the property:
- Urban properties: IMI rates generally range from 0.3% to 0.45%
- Rural properties: These have higher rates, typically around 0.8%.
The taxable value (VPT) is determined by several factors, including the property’s size, location, age, and condition. Municipalities in Portugal can set their own rates within the allowable range, so the specific IMI rate can vary depending on the region.
In addition to regular IMI, owners of high-value properties (those exceeding €600,000) may also be subject to AIMI (additional to IMI), which is an additional tax for luxury real estate.
IMI is typically paid in installments during the year, with deadlines depending on the total amount owed.
How is IMI calculated for residential properties in Portugal?
IMI for residential properties in Portugal is calculated based on the taxable value (VPT), which is assessed by the local tax authorities. The VPT is determined using several key factors:
- Location: Urban properties tend to have a higher taxable value compared to rural properties due to their proximity to services and amenities.
- Size: The total area of the property, including the land and built space, directly impacts the taxable value.
- Age: Older properties may be subject to depreciation, which reduces the VPT, while newer properties typically have a higher VPT.
- Condition and Quality: The quality of construction and the materials used influence the property’s taxable value.
- Purpose: The use of the property (e.g., residential or commercial) also plays a role in determining the VPT.
Once the VPT is determined, the local municipality applies an IMI rate. The applicable rate depends on the type of property and its location:
- Urban residential properties: The IMI rate generally ranges from 0.3% to 0.45% of the VPT.
- Rural properties: These properties have higher IMI rates, up to 0.8%.
Municipalities have the discretion to set their specific IMI rates within the allowable range, and certain exemptions or reductions may apply for energy-efficient properties, low-income families, or new constructions for a limited period.
Are there any IMI exemptions available for property owners in Portugal?
Yes, certain IMI exemptions are available for property owners in Portugal. For example, newly constructed or renovated properties may qualify for an IMI exemption for up to three years. Low-income families, properties with energy-efficient classifications, or homes in regeneration zones may also be eligible for temporary or permanent IMI reductions or exemptions.
How can I pay property taxes in Portugal?
You can pay real estate taxes in Portugal through various methods, including direct payment at a bank, through ATMs, online via the Portal das Finanças (Portuguese Tax Authority’s website), or at local post offices. Many property owners set up automatic payments to ensure timely payments.
How do non-residents pay real estate tax in Portugal?
Non-residents can pay real estate taxes the same way as residents, either through online banking, at ATMs, or via the Portal das Finanças. If non-residents don’t have a Portuguese bank account, they may need to use international transfer options or appoint a tax representative to manage payments on their behalf.
What is AIMI (Additional to Municipal Property Tax)?
AIMI (Adicional ao IMI) is an additional tax levied on high-value real estate in Portugal. It applies to properties with a total taxable value (VPT) above €600,000 for individuals and €1,000,000 for companies. AIMI is an extra layer on top of the regular IMI and is aimed primarily at luxury or high-value properties.
Who is required to pay the Additional to IMI (AIMI), and when does it apply?
Individuals who own residential properties or land for construction with a combined VPT exceeding €600,000 are required to pay AIMI. Companies must pay AIMI if their property portfolio’s total VPT exceeds €1,000,000. The AIMI rate is 0.4% for individuals, 0.7% for corporate entities, and 1% for properties valued over €1,000,000. AIMI is payable annually in September.
What are the timelines for paying property taxes in Portugal?
The IMI (Municipal Property Tax) is typically paid in one or more installments depending on the total amount owed:
- If the IMI is less than €100, it must be paid in one installment in April.
- For amounts between €100 and €500, it can be paid in two installments, due in April and November.
- For IMI exceeding €500, it can be paid in three installments, due in April, July, and November.
What should non-residents be aware of regarding property taxation in Portugal?
Non-residents should be aware that they are subject to the same property taxes as residents, including IMI and AIMI (for high-value properties). Rental income is taxed at a flat rate of 28%, and capital gains tax is also 28% for non-residents. Additionally, non-residents should appoint a tax representative if they do not reside in an EU/EEA country, and ensure all taxes are paid through Portuguese banks or financial systems.
How often do you pay property taxes in Portugal?
Property taxes in Portugal, specifically IMI (Municipal Property Tax), are paid annually. The payment is typically made in one, two, or three installments depending on the total tax amount owed, with deadlines in April, July, and November. You may also need to pay AIMI, depending on if the total real estate is worth above €600,000.
What is the luxury tax for property in Portugal?
The luxury tax in Portugal is referred to as AIMI (Additional to IMI), which applies to high-value properties. It is levied on properties with a total taxable value (VPT) above €600,000 for individuals and €1,000,000 for companies. The AIMI rate is 0.4% for individuals and 0.7% for companies, with a higher rate of 1% for properties exceeding €1,000,000.
What is the Capital Gains Tax rate when selling properties in Portugal?
For non-residents, capital gains on property sales are taxed at a flat rate of 28%. For residents, 50% of the capital gain is added to their overall income and taxed at progressive rates, ranging from 14.5% to 48%.
Does owning property in Portugal automatically make you a tax resident?
No, owning property in Portugal does not automatically make you a tax resident. You become a tax resident if you spend more than 183 days in Portugal during a year or if you have a permanent residence in the country and demonstrate the intent to stay long-term.
What is wealth tax in Portugal?
Portugal does not have a general wealth tax, but high-value property owners are subject to AIMI (Additional to IMI). AIMI applies to properties with a combined taxable value exceeding €600,000 for individuals or €1,000,000 for companies. This is effectively considered a form of wealth tax on real estate.
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