Portugal tax in 2026: IRS, IFICI, IRS Jovem and NHR explained

Start here. Most newcomers fall into exactly one of five boxes, and the box decides more about your tax bill than any deduction ever will. The regimes are mutually exclusive: IRS Jovem cannot be combined with NHR, IFICI or the ex-resident regime, and IFICI cannot be combined with NHR or the ex-resident regime.3 sources

Choosing IFICI has a long tail: anyone who has ever benefited from IFICI is permanently barred from IRS Jovem, and IFICI itself can only be used once in a lifetime. If you are young and on a moderate salary, run the numbers both ways before you register.2 sources

Under Article 16 of the Código do IRS you are resident for a year if you spend more than 183 days in Portugal, consecutive or not, in any 12-month period that starts or ends in that year, or if you spend less time but have a home here, on any day of that period, in conditions suggesting you intend to keep and occupy it as your habitual residence. A day counts if it includes a night spent in Portugal.2 sources

Portugal splits the year. You become resident from the first day of your stay, not from 1 January, unless you were also resident at some point in the previous year. You stop being resident from your last day here, with two anti-avoidance exceptions: if you spent more than 183 days here that year and then earn income that would have been taxable, or if you become resident again the following year, you are treated as resident for the whole year.2 sources

Residence is tested per person, so spouses can have different status. Update your address with Finanças as soon as you actually live here: the residence date drives which regime you can claim, when the IFICI and IRS Jovem clocks start, and whether income earned before the move is Portuguese-taxable at all.2 sources

If another country also treats you as resident, the double tax treaty's tie-breaker decides: a permanent home, then your centre of vital interests (where your personal and economic ties are closer), then where you habitually stay, then nationality. Keep leases, utility bills, travel records and employment contracts; they are the evidence.2 sources

IRS (imposto sobre o rendimento das pessoas singulares, the personal income tax) is progressive: each slice of taxable income is taxed at its own rate. The table below is the scale in force for 2026 under the 2026 State Budget law (Lei 73-A/2025), as published in Article 68 of the Código do IRS.2 sources

On top of the scale, a solidarity rate (taxa adicional de solidariedade) of 2.5% applies to taxable income between €80,000 and €250,000, and 5% above €250,000. Couples who file jointly apply both the scale and the surcharge to half their combined income and then double the result.2 sources

Pending change: on 17 September 2026 the Council of Ministers approved a bill to cut the rates of brackets 1 and 6 by 0.3 points and brackets 2 to 5 by 0.5 points, for all 2026 income. It reached parliament on 21 September with a request for an urgent single vote, and the government wants the cut reflected in new withholding tables from November pay and the Christmas bonus. Until parliament approves it and it is published, the rates in force remain the legal reference.3 sources

If the cut passes, your final 2026 tax will be calculated at the new rates when you file in spring 2027, whatever was withheld during the year. Lower withholding in November and December means more cash now but possibly a smaller refund later, because withholding is only an advance on the final bill.2 sources

For an employee the arithmetic has four steps. Social security takes 11% of gross pay. Then the specific deduction (dedução específica) is subtracted: €4,587.09 in 2026 (8.54 times the IAS, the social support index of €537.13), or your social security contributions if they are higher. What remains is taxable income, which goes through the brackets; personal deductions such as health or education then come off the tax itself.3 sources

Low earners are protected by the mínimo de existência (subsistence minimum), worth €12,880 in 2026, the greater of that figure and 1.5 × 14 × IAS. If your income is mainly salary, pension or a listed professional activity, an allowance means gross income up to €12,880 is effectively IRS-free once the €250 general-expenses credit is claimed, and the allowance fades out quickly above that. It never applies if your gross income exceeds €16,543.60 (2.2 × 14 × IAS).2 sources

Use the calculator below to estimate your own social security, taxable income, IRS bracket by bracket, solidarity surcharge, net income and effective rate. It applies the 2026 rates in force (or the proposed cut, if you switch it on), the mínimo de existência abatement, the rule that IRS Jovem exempt income still sets your rate, and the €250 general family expenses credit. It assumes a single filer in mainland Portugal with only this income and leaves out the municipal IRS share, other personal deductions, dependants and joint filing. For freelancers it applies the 75% simplified-regime coefficient, deducts social security above 10% of turnover and assumes you meet the 15% expense test, but not the first-year reliefs explained in the freelancer section. Treat the result as a close estimate, not a tax assessment. The worked examples quote IRS before the €250 general expenses credit, so the calculator's total IRS is €250 lower, except under IFICI, where that credit does not apply.5 sources

IRS Jovem (Article 12.º-B) partially exempts salary (Category A) and freelance (Category B) income for anyone aged 35 or under on 31 December who files as a taxpayer rather than a dependant. Since 2025 there is no requirement to have completed a degree or any other course. You opt in each year on your Modelo 3 return.3 sources

The exemption covers your first ten years of earning: 100% in year 1, 75% in years 2 to 4, 50% in years 5 to 7 and 25% in years 8 to 10, with the exempt amount capped at 55 × IAS, which is €29,542.15 for 2026. Years with no salary or freelance income, and years when you were someone's dependant, do not count. People already working before 2025 slot in at the year matching the number of earning years already behind them.3 sources

The detail most guides miss: the exemption is applied to gross income, but the exempt part is still added back to fix your tax rate (an exemption with progression). Your remaining taxable income is taxed at the average rate that would apply to the total. The saving is still large, just not as large as simply deleting the exempt income.3 sources

Employees can ask their employer to withhold less during the year by stating which year of the regime they are in; no official form is needed. Freelancers cannot reduce withholding, so they receive the benefit as a refund. If you worked abroad before moving, how foreign earning years count is not spelled out in the law: the OCC reads the clock as starting with your first year of income in Portugal, but get written confirmation if your case depends on it.2 sources

IFICI (incentivo fiscal à investigação científica e inovação, Article 58.º-A of the Estatuto dos Benefícios Fiscais) taxes qualifying Portuguese salary and freelance income at a flat 20% for ten consecutive years. The rate applies to net income, so for employees it is 20% of gross pay minus the specific deduction (in practice, minus social security). Personal deduction credits and joint filing do not apply to that income.3 sources

You qualify if you become resident without having been resident in any of the previous five years, have never had NHR, IFICI or the ex-resident regime, and do qualifying work. The routes are: higher-education teaching and scientific research; qualified jobs in projects with contractual investment benefits; listed highly qualified professions at exporting industrial or service companies or companies with investment-aid benefits; qualified jobs at companies recognised by AICEP or IAPMEI; R&D staff whose costs qualify for SIFIDE; jobs at certified startups; and rules still to be set by the Azores and Madeira.4 sources

The highly qualified profession route uses Portaria 352/2024/1: Portuguese profession codes 112, 12, 13 (except 1349), 21 (except 216), 2163.1, 221 (doctors), 231 and 25 (ICT specialists), held by someone with a doctorate, or a degree at European Qualifications Framework level 6 plus three years of experience. The employer's main activity must be on the listed CAE codes (extractive industries, manufacturing, information and communication, physical-science R&D, higher education, human health) and it must export at least 50% of turnover, or else benefit from the RFAI investment-aid regime.3 sources

Foreign income is generously treated: foreign employment, business, investment, rental and capital-gain income is exempt, though it is still counted to set the rate on any other income you aggregate. Two exceptions matter: foreign pensions are taxed normally, and income from blacklisted tax havens is taxed at 35%.3 sources

Registration is on the Portal das Finanças by 15 January of the year after you become resident, and each route has a certifying body (FCT, AICEP, IAPMEI, ANI, Startup Portugal, or the AT itself for the profession route). A late registration still works but only from the year you register, for the rest of the ten years. Once you have filed, your employer can withhold at 20% if you show proof of the application.4 sources

The old Non-Habitual Resident regime was revoked from 1 January 2024. It still applies, for the rest of their ten years, to people already registered, people who were resident by 31 December 2023, and people who became resident during 2024 and could show a qualifying tie such as a work contract or residence visa dated by the end of 2023, or a lease, purchase promise or school enrolment dated by 10 October 2023.3 sources

The normal deadline for those 2024 arrivals was 31 March 2025, but a late registration is still possible: it takes effect from the year you register, for whatever remains of the ten years counted from your arrival. Surviving NHR holders keep the 20% rate on high-value activities, exemption of much foreign income and, for pensions, the 10% flat rate.2 sources

Programa Regressar, the ex-resident regime in Article 12.º-A, excludes 50% of salary and freelance income from tax for five years, up to €250,000 a year, for people who were resident in Portugal before, were not resident in the previous five years and become resident again by 2026. It applies automatically when you tick it on your return, so 2026 is the last year to qualify unless the OE2027 extends it.2 sources

Freelance income (Category B) is usually taxed under the simplified regime if your turnover was under €200,000 the year before. You do not deduct actual expenses; instead a fixed share of turnover is taxable: 75% for the professional activities listed in the Article 151 table (most liberal, technical and creative professions), 35% for other services, 15% for sales of goods and 95% for crypto mining and royalties.2 sources

There are two adjustments. Social security above 10% of turnover is deducted. And part of the 75% or 35% treatment depends on real costs: 15% of turnover must be matched by €4,587.09 (or, if higher, social security up to 10% of turnover) plus business expenses on invoices with your NIF in e-Fatura, rent of a workspace and similar items. Any shortfall is added to your taxable income.2 sources

New freelancers get two reliefs: the coefficients are halved in the first year of activity and cut by 25% in the second, if you have no salary or pension income in those years and did not close an activity in the previous five years. Clients with organised accounts withhold 23% on listed professions (11.5% on other services, 20% under IFICI), unless you expect turnover below the VAT small-business threshold.2 sources

Employees pay 11% of gross pay to Segurança Social and employers add 23.75%. The contributions cover pension, unemployment and family benefits, and for income tax purposes they act as the employee's specific deduction once they exceed €4,587.09.2 sources

Independent workers pay 21.4% on a relevant income of 70% of their service income (20% of income from selling goods), so 14.98% of service turnover in practice. You file a quarterly declaration in January, April, July and October covering the previous three months; one third of the resulting base applies to each of the next three months, payable between the 10th and 20th of the following month. The monthly base is capped at 12 × IAS (€6,445.56), and the minimum contribution is €20 a month.3 sources

When you start freelancing for the first time, you are only enrolled in the scheme from the first day of the 12th month after you open your activity, which gives roughly a year without contributions, though you must still file the quarterly declarations. You are also exempt while you have a salary of at least 1 × IAS a month and average freelance income below 4 × IAS (€2,148.52) a month.2 sources

If one client pays more than 50% of your freelance income, that client owes a contribution of its own: 7%, or 10% if the dependency exceeds 80%. Portugal also has social security agreements with countries such as the United States, which stop the same work being charged in both systems.3 sources

Dividends and interest are taxed at a flat 28%, withheld at source when paid in Portugal and self-assessed when paid from abroad, with a credit for foreign tax up to the treaty rate. You can instead aggregate them into the progressive scale, which helps low earners; if you do, only 50% of dividends from qualifying EU companies is taxed. Income from blacklisted jurisdictions is taxed at 35%.3 sources

Gains on shares, bonds and funds are taxed at 28% on the net balance of gains and losses for the year. Since the 2024 reform, gains on listed securities and fund units are partly excluded the longer you hold them: 10% for more than two years, 20% from five years and 30% from eight. Gains on assets held under 365 days must be aggregated at progressive rates if your taxable income, including them, reaches €86,634.3 sources

Crypto-assets: gains on crypto held for 365 days or more are excluded from tax, and gains held for less are taxed at 28%. Swapping one crypto for another is not taxed; the new coin inherits the old cost. NFTs are outside these rules, the long-term exclusion does not apply when the counterparty is in a jurisdiction without a treaty or information exchange, and leaving Portugal counts as a disposal of your crypto. Mining is business income, taxed on 95% of receipts under the simplified regime.3 sources

Residential rental income is taxed at an autonomous rate of 25%, reduced for long permanent-home leases: 15% for leases of five to ten years (with 2 further points off per renewal, up to 10 points), 10% for ten to twenty years and 5% for twenty years or more. Since 1 January 2026, under Decreto-Lei 97/2026, rents of up to €2,300 a month on purely residential leases, existing ones included, are taxed at 10% until the end of 2029, unless a lower rate already applies.4 sources

Pensions (Category H) are taxed on the progressive scale after a deduction equal to the employment one: €4,587.09 per person in 2026, or the whole pension if it is smaller. Foreign pensions go on Annex J of the Modelo 3. Whether Portugal or the paying country taxes first depends on the treaty, and a foreign tax credit stops you paying twice.3 sources

Under the US-Portugal treaty (Article 20), private pensions paid for past employment are taxable only in the country of residence, but US Social Security may also be taxed by the United States. Because of the saving clause in the Protocol, the US still taxes its citizens on everything, then credits Portuguese tax on income the treaty gives to Portugal; Portugal, in turn, credits US tax on items the treaty lets the US tax for reasons other than citizenship, such as Social Security.2 sources

Under the 2025 UK-Portugal convention (Article 17), pensions, including the UK State Pension and workplace or personal pensions, are taxable only in the country of residence. Pensions paid by the UK government for public service (civil service, armed forces, many NHS and local government schemes) remain taxable only in the UK under Article 18, unless you are a Portuguese national without British nationality.2 sources

Moving to Portugal does not end US filing. Citizens abroad get an automatic extension to file Form 1040 by 15 June, but interest runs on any tax not paid by 15 April. The US gives a credit for Portuguese income tax, so many Americans in Portugal owe little or no US tax on their Portuguese salary.2 sources

File an FBAR (FinCEN Form 114) if your foreign accounts together exceed $10,000 at any point in the year; it is due on 15 April with an automatic extension to 15 October. Form 8938 is also required, with your tax return, once foreign financial assets exceed $200,000 at year end or $300,000 at any time for single filers living abroad ($400,000 and $600,000 for joint filers).3 sources

Avoid Portuguese or other non-US funds and ETFs: the US treats them as PFICs (passive foreign investment companies), which need a Form 8621 each and are taxed punitively. Keep investing through US-domiciled funds at a US broker that accepts Portuguese residents. Social security is coordinated by the US-Portugal totalization agreement, so you should not pay into both systems for the same work.2 sources

A new UK-Portugal Double Taxation Convention was signed in London on 15 September 2025 and entered into force on 29 December 2025. It applies in Portugal from 1 January 2026, and in the UK from 6 April 2026 for income tax and capital gains tax. It replaces the 1968 convention, which no longer applies.2 sources

Pensions are taxed where you live, UK government service pensions stay in the UK, and dual residence is resolved by the standard tie-breakers. The new treaty also lets Portugal count income it exempts under the treaty when setting your rate on other income.1 source

UK State Pensioners can get an S1 form from NHS Overseas Healthcare Services. Register it with Segurança Social and at your local centro de saúde to receive a número de utente and state healthcare on the same basis as Portuguese citizens.2 sources

Buying property triggers IMT (transfer tax) on a sliding scale plus 0.8% stamp duty; see our property guide for the full tables. Since Decreto-Lei 97/2026, non-resident buyers of homes pay a flat 7.5% IMT with no exemptions unless they were previously Portuguese tax residents; the excess is refundable on request if they become Portuguese tax resident within two years or let the home at a moderate rent of up to €2,300 a month for at least 36 of the first five years.3 sources

Owning property means annual IMI (municipal property tax): 0.3% to 0.45% of the taxable value (VPT) of urban property, set by each municipality, and 0.8% for rural land. It is paid in May if €100 or less, in May and November up to €500, and in May, August and November above that.2 sources

Portugal has no general wealth tax, but large residential holdings pay AIMI (the additional IMI). Individuals deduct €600,000 from the total VPT of their residential property and land for construction, then pay 0.7%, rising to 1% on the part of total value between €1 million and €2 million and 1.5% above €2 million; couples who opt to be taxed jointly double these thresholds. Commercial property is excluded and AIMI is paid in September.4 sources

There is no inheritance tax as such: inheritances and gifts pay 10% stamp duty, but spouses and unmarried partners, children and grandchildren, and parents and grandparents are exempt. Gifts of real estate still pay 0.8% stamp duty, even to exempt relatives.3 sources

When residents sell property, only 50% of the gain is taxed, at progressive rates. Gains on your permanent home are excluded if the proceeds, net of any mortgage paid off, are reinvested in another permanent home in Portugal or the EU or EEA between 24 months before and 36 months after the sale. For sales from 2026 to 2029, gains on any home are also excluded if reinvested in Portuguese property let at a moderate rent of up to €2,300 a month.3 sources

Personal allowances in Portugal are tax credits, deducted from the tax itself. Most depend on invoices carrying your NIF (número de identificação fiscal, your tax number) that suppliers report to the e-Fatura system, so ask for factura com contribuinte every time you pay.2 sources

The main credits for 2026: 35% of general household spending up to €250 per taxpayer; 15% of health costs up to €1,000; 30% of education up to €800; 15% of rent on your permanent home up to €900 (rising to €1,000 from 2027, more for low earners); 25% of care-home costs up to €403.75; 15% of the IVA on restaurants, hairdressers, car repairs and vets, plus all the IVA on public transport passes, up to €250; and €600 per dependant (€726 for children under three).2 sources

Invoices must be reported by the end of February of the following year; the AT shows your deduction totals by 15 March, and you have until 31 March to complain. Above €80,000 of taxable income, most credits (not the dependant credits) are capped at €1,000 in total.2 sources

The annual return (Modelo 3) is filed online on the Portal das Finanças between 1 April and 30 June for the previous year's income. Residents generally have to file, and filing is what unlocks your deductions and any refund. Couples can choose joint or separate filing each year; test both.2 sources

For returns filed on time, the AT should issue its assessment by 31 July and any tax due must be paid by 31 August. If you are waiting for the final foreign tax figure needed for a credit, you can tell the AT within the normal period and file by 31 December instead.3 sources

Filing late or not at all carries a fine of €150 to €3,750, and simple first lapses fixed quickly can be waived. Non-residents outside the EU and EEA who have Portuguese tax affairs must appoint a fiscal representative, unless they sign up for electronic notifications on the Portal das Finanças.3 sources

The 2026 rate cut: the government sent it to parliament as a separate law, outside the budget, and asked for an urgent single vote on all stages. If approved, new withholding tables are expected for November pay, followed by another update in January 2027.3 sources

The 2027 State Budget: the constitutional deadline is 10 October, which falls on a Saturday, so the proposal is expected on Friday 9 October 2026. Parliament's first vote is scheduled for 28 October and the final vote for 24 November; the Socialist Party has said it will abstain, which makes approval likely.2 sources

Automatic updates for 2027: Lusa reports that the bracket thresholds will be updated in line with growth in GDP and GDP per worker, and the specific deduction will rise with the 2027 IAS, which is normally set by portaria in late December.2 sources