ATA Income Tax Brackets in Portugal for 2024

A stable democracy, Portugal is well-situated for accessing the European market and has been a hotbed for innovation. Ranked 25th in Forbes’ Best Countries for Doing Business 2019, Portugal’s globally competitive business environment has been attracting new businesses each year. The legal and regulatory landscape makes it easy for businesses to get started, as evidenced by its ranking in 39th place for ease of doing business, according to the World Bank Group 2019. 

Tax in Portugal is administered by the official tax body, Autoridade Tributária e Aduaneira. The Income Tax Codes provide guidance and support in the form of income tax tables for individuals and businesses. Taxpayers must familiarize themselves with these tax tables and the corresponding income tax brackets and income tax rates, for effective tax planning and to remain compliant with the tax laws of Portugal.

Here you will learn more about:

• headline tax rates
• personal income tax (PIT) rates
• corporate income tax (CIT) rates
• capital gains tax (CGT) rates
• withholding tax rates for residents and non-residents
• value-added tax (VAT) rates

Headline Tax Rates in Portugal

Personal Income Tax (PIT) Brackets for Individuals in Portugal for 2024

Personal income tax is levied on the income of citizens resident in Portugal and on non-residents who earn income in Portugal. While persons can file their taxes individually, couples and civil partnerships can choose to file jointly. However, if they do so, the tax charged will be based on the total revenue of the persons within that household. 

A tax resident is an individual who remains in the country for over 183 days within a 12-month period, whether this is consecutive or not. 

There is a special income tax scheme for foreign citizens who intend to live in Portugal or for nationals who are living outside the country and wish to return. These individuals will have a non-habitual resident status.

On the other hand, individuals who are self-employed must register with the tax office and submit a self-employment registration certificate prior to starting any self-employment activity. This may be done through the Finance Portal.

Personal Income Tax (PIT) Brackets for Resident Individuals

Progressive tax rates for resident individuals in Portugal are tabulated below.

Joint taxation may be available for married taxpayers or those in a de facto union where the rates set out above will apply to the quotient of taxable income, multiplying the result obtained by two. 

Residents are also subject to a solidarity surtax on taxable income exceeding EUR 80,000 at a rate which varies between 2.5% and 5%. When the taxable income exceeds EUR 250,000, it is divided into two parts:

• one equal to EUR 170,000, to which the rate of 2.5% applies, and
• the other, equal to the taxable income that exceeds EUR 250,000, to which the rate of 5% applies.

Personal Income Tax (PIT) Brackets for Non-Resident Individuals

Non-resident Individuals are subject to a flat rate of 25% for income derived from employment, self-employment, and pension income.

Personal Income Tax Due Dates

Corporate Income Tax (CIT) Rates in Portugal for 2024

Varying Corporate Income Tax (CIT) rates apply to corporate entities in Portugal depending on their structure, certain conditions being met and region. They are tabulated below.

Surtaxes

A summary of surtaxes that may apply are provided below.

Corporate Income Tax Due Dates

Capital Gains Tax (CGT) in Portugal

The general Capital Gains Tax (CGT) rates for companies and individuals in Portugal are summarized below.

Withholding Tax Rates for Residents and Non-Residents in Portugal

In general, withholding tax (WHT) is levied on residents and non-residents in Portugal. For a resident, tax may constitute a payment on account of the final income tax due. However, for a non-resident, tax withheld is the final tax, except in the case of property income.

Portugal is signatory to several double taxation treaties (DTTs) which may vary WHT rates. A taxpayer may also benefit from the provisions of these DTTs.

Value-Added Tax Rates in Portugal

The Value-Added Rates in Portugal and its regions are summarized below.

The reduced rate applies to the supply of certain products and services including but not limited to meals at restaurants, take away, musical instruments, and agricultural tools.

The super-reduced rate applies to the supply of certain products and services including but not limited to the supply of some essential food products, pharmaceutical products, hotel accommodation, agricultural products and passenger transport.