Rates and allowances

Portugal tax home page

Income Tax (Imposto sobre o Rendimento das Pessoas Singulares)
Tax year ended 31st December 2009

Personal Allowances for Portugal income tax

Capital Gains and Losses

Trading income

Rental income

Savings income

Employment income 

Tax administration

Taxation of married/ civil couples

Pensions

Other tax credits   

Double tax relief

Personal tax credits for Portuguese income tax

General allowance  234 Euros                                                                                                                      Allowance for parent in one-parent family     341 Euros.

Child allowance

For each child aged over 3 years old       -      170 Euros                                                                                       For each child aged 3 or under                 -       341 Euros.

For each older relative  living with family

234 Euros each (or 362 Euros if only one relative).

Disabled allowance

1,491 Euros per taxpayer and 639 Euros per child.                                                                                      Increase in allowance for 90% or more incapacity:     852 Euros                                                                          Allowance per older relative:    639 Euros.

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Capital Gains and Losses - Mais-Valias de imóveis. 

Capital gains are taxed as normal income, with allowable deductions for purchase and sales expenditure.

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income from self-employment  (Empresariais e profissionais)
 

Simplified regime (regime simplificado)

This is an allowable option for businesses which in the previous year had gross income not exceeding 149,739 Euros or net income not exceeding 99,760 Euros.

This regime uses a system of coefficients to calculate the taxable income.

Organised accounting regime (regime da contabilidade)

This is the default tax regime.

 

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Rental Income - Rendimentos Prediais

The following expenses are deductible against rental income.
                                                                                                                    
- Repairs and maintenance expenditure.
- Property taxes paid.
- Condominium charges.

Non-residents are only taxable if their property is rented out. There is no deemed income tax based on the rateable value of the property, as in Spain.

 

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Savings Income- Capitais

Dividends

50% of the gross dividend received is taxable. There is no special tax rate for dividends.

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Tax administration

The tax year in Portugal is the same as the calendar year, and the tax system is based on self-assessment.


An annual tax return (Modelo 3) must be submitted. The general presentation period is 10th March to 15th April for returns submitted via the internet, and 2nd February to 16th March for paper declarations.

The self-employed must make three payments on account of tax during the year: 20th July, 21st September and  21st December.

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Taxation of married/ civil couples

The total taxable income (before tax credits and tax deducted at source) for the couple is divided by two, and the tax payable calculated according to the standard tax rates. The resulting amount is then multiplied by two. Tax credits and tax withheld at source are then deducted to give the final tax payable.

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Pensions (Pensões)

The first 6,000 Euros of pension income received per annum is tax-free.
 

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Selected other tax credits - Deduçőes À Colecta 

1. Mortgage interest: Tax credit of 30%, maximum 586 Euros. A property in another European state is also eligible if the state in question has information exchange with Portugal.
2. Health insurance costs. Tax credit of 30%, no maximum limit for taxpayer.
3. Education and professional training. Tax credit of 30%, maximum 682 Euros.
4. Private pension contributions: Tax credit of 20%, maximum of 300-400 Euros depending on age.
5. Purchase of computer equipment: Tax credit of 50%, maximum 250 Euros.
6. Purchase of new renewable energy equipment: Tax credit of 30%, maximum 777 Euros.
7. Amounts invested in personal savings accounts: Tax credit of 20%, maximum 350 Euros.
8. Life and health insurance premiums.

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Double Tax Credit

The tax relief given is the lower of the foreign tax paid and the tax payable in Portugal.


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These notes are intended as a guideline to income tax in Portugal and should not be used as a substitute for proper professional advice. Please contact us and we will be happy to assist you.

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