Latest news and stories about tax reduction in finance in Portugal for expats and residents.
The Portuguese government is set to roll out a new income tax reduction beginning this November. The adjustment aims to provide financial relief to taxpayers through updated withholding tax tables.
Prime Minister Luís Montenegro announced a reduction in income tax (Imposto sobre o Rendimento das Pessoas Singulares or IRS) for the first six income brackets, effective this November. Additionally, the government will provide an extraordinary supplement to pensioners receiving up to 1,611 euros. These measures, valued at 400 million euros for tax relief, are expected to be approved by the Council of Ministers this Thursday.
Update: Parliament rejects no-confidence motion against government
Parliament has officially rejected a no-confidence motion brought by the Chega party against the government. Despite the political tension, Prime Minister Luís Montenegro successfully defended his administration's stability, while the government confirmed that the Minister of Internal Administration will remain in his position.
Luís Filipe Montenegro Cardoso de Morais Esteves (born February 16, 1973, in Porto) is a Portuguese lawyer and center‑right politician who has served as Prime Minister of Portugal since April 2, 2024. A long‑time member of the Social Democratic Party (PSD), he is the leading figure of the post‑Troika generation of Portuguese conservatives. Montenegro was elected to the Assembly of the Republic in 2002 for the Aveiro district and remained an MP for 16 years, becoming PSD parliamentary leader from 2011 to 2017 during the bailout and austerity period under Prime Minister Pedro Passos Coelho. He was a prominent defender of strict austerity measures, arguing in 2014 that “the life of the people is no better, but the life of the country is a lot better,” a phrase that has followed his public image since. After an unsuccessful leadership bid against Rui Rio in 2020, Montenegro won the PSD leadership in 2022. He then forged the centre‑right Democratic Alliance (PSD–CDS‑PP and allies), which won a plurality of seats in the 2024 legislative election. Refusing to partner with the far‑right Chega, which he has called “often xenophobic, racist, populist and excessively demagogic,” he formed a minority government as head of the XXIV Constitutional Government on April 2, 2024. His first government fell in March 2025 after a no‑confidence vote linked to a conflict‑of‑interest affair, but fresh elections saw the Democratic Alliance increase its seat share, allowing Montenegro to return as prime minister leading the XXV Constitutional Government. His importance to Portugal lies in attempting to re‑center the traditional centre‑right after the crisis years, defending liberal‑conservative economics and EU alignment while drawing a sharp line against formal cooperation with the radical right, thus shaping how Portuguese democracy manages its new multi‑party era.
André Ventura, born January 15, 1983, is a lawyer, academic, and Portugal's most prominent far-right leader. He founded Chega ("Enough") in 2019 after his PSD mayoral campaign attacked the Romani community. Chega surged from 1.3% in 2019 to 22.8% in May 2025, becoming parliament's second-largest party and making Ventura Leader of the Opposition.
His platform emphasizes immigration restrictions, law-and-order policies, constitutional reform, and contains inflammatory anti-Romani rhetoric that has triggered multiple discrimination convictions and investigations. Politically classified as far-right by international media, Ventura cultivates alliances with European far-right figures including Marine Le Pen and Santiago Abascal.
The Portuguese government has decided to maintain current ISP tax reduction levels on diesel and petrol for the upcoming week, despite forecasts of a decline in fuel prices.
The Somos Todos Cidadãos movement, which leads the municipal executive, stated that this is the first time the council has adopted these mechanisms to reduce the tax burden. The measures will take effect in 2027.
The reduction in IRS up to the 6th tax bracket will increase the net income of taxpayers in the last two months of the year.
Economist Filipe Grilo explains the impact that the reduction in IRS announced this Tuesday by the Prime Minister will have.
Prime Minister Luís Montenegro has announced a new reduction in IRS income tax up to the sixth bracket, a measure that Paula Franco, head of the Order of Certified Accountants (OCC), considers “positive,” but which will require the Portuguese to do the math once again. Similar to previous years, the extra money in their pockets will have an impact on the final settlement with...
Filipe Santos Costa, a commentator for CNN Portugal, explains how the Prime Minister managed to “change the subject of the day, which shifted from the motion of no confidence to the pension bonus and the reduction of income tax,” taking the opportunity to “reverse the cycle of enormous unpopularity in which the Government finds itself.”
The reduction in IRS income tax announced by Luís Montenegro will take effect with the payment of November's salary. The withholding tax table to be applied that month will reflect the reduction applied to the entire year.
The Minister of Finance assures that public accounts will end 2026 with at least a zero balance, despite the 800 million euro impact of two measures announced by the Prime Minister during the motion of no confidence debate: an IRS tax reduction and an extraordinary supplement for pensioners. Joaquim Miranda Sarmento stated in an interview with SIC Notícias that the government will maintain balanced accounts and a declining public debt, noting that the fiscal space for these measures stems from budget execution performance through August. The IRS reduction, impacting the first six tax brackets, will be reflected in November's withholding tax, while the 400 million euro pensioner supplement will be paid in December. Miranda Sarmento ruled out further fuel tax cuts, prioritising income support over fuel subsidies.
The PS abstained, Chega shouted “resignation” and the Government united to block the largest opposition parties. Montenegro used the debate to announce a reduction in IRS income tax and a bonus for pensioners.
Montenegro announces an IRS cut and pension bonuses. A week ago, the Ministry responded to Parliament that the tax reduction would not be implemented this year due to 'budgetary responsibility'.
The Government will propose a new reduction in IRS tax rates up to the sixth bracket, with retroactive effects to January 2026. The measure will be reflected in November's withholding tax and the Christmas bonus. Luís Montenegro also announced an extraordinary supplement for pensioners, to be paid in December. The measures are expected to be finalised at the next Council of Ministers meeting.
Luís Montenegro accuses Chega of living off “elections, motions, and resignations” and defends the Government's actions. The PM also announces a supplement for pensioners and an income tax reduction to support the middle class.
The Minister of Finance guaranteed that the commitment is to continue lowering the tax.
The reduction of income tax from 25% to 10% for rents up to 2,300 euros has been promulgated by the President. Landlords will see a 20% increase in net income.
The government's measures for the housing market have been enacted by the President of the Republic and will come into force. They will reduce taxes.
Minimum unit tax rates for the ISP on unleaded petrol fall to 199.89 euros per 1,000 litres, and those for diesel drop to 156.66 euros.
The Government will apply a new temporary and extraordinary reduction in the unit rates of the ISP tax on diesel and petrol, following the announcement of new fuel price increases. The Trump Administration is considering plans to occupy or blockade Kharg Island in order to pressure Iran to reopen the Strait of Hormuz. The Pentagon has sent the 31st Marine Expeditionary Unit, a rapid response force, to the Middle East. We are updating all information on the conflict here, minute by minute.
The Government will apply a new temporary and extraordinary reduction in the unit rates of the ISP tax on diesel and petrol, following the announcement of new fuel price increases. The Trump Administration is considering plans to occupy or blockade Kharg Island in order to pressure Iran to reopen the Strait of Hormuz. The Pentagon has sent the 31st Marine Expeditionary Unit, a rapid response force, to the Middle East. We are updating all information on the conflict here, minute by minute.
ISP tax rates on diesel and petrol will fall again through an 'extraordinary and temporary' discount of 2.6 and 1.4 cents per litre, respectively, in mainland Portugal. The actual savings for consumers will be 3.2 cents per litre for diesel and 1.7 cents for petrol, as the reduction in ISP also lowers the VAT impact. This information was provided by the Ministry of Finance on Friday, March 20. The measure concerns the Tax on Petroleum and Energy Products (ISP) and aims to mitigate the effects of the war in the Middle East on the wallets of the Portuguese people. The measure is a direct response to the fuel price hike expected on Monday. Fuel prices are set to soar again next week, with a full tank of diesel expected to cost over 100 euros.
The additional discount was decided by the Government at a time when a new rise in fuel prices is expected for next week.
Faced with another rise in fuel prices, the Government announced this Friday an update to the temporary and extraordinary reduction of unit tax rates on Petroleum and Energy Products (ISP) applicable to diesel and unleaded petrol in mainland Portugal, as both have risen by more than ten cents compared to the week before the attack.
The government has approved new extraordinary reductions in ISP tax rates for mainland Portugal, resulting in savings of 1.8 cents per litre for diesel and 3.3 cents for petrol next week. Including previous temporary discounts, total savings will reach 6.1 cents for diesel and 3.3 cents for petrol compared to early March prices. Unleaded petrol is now included in these tax cuts due to a projected price increase exceeding 10 cents. These measures follow warnings from the National Association of Fuel Retailers (Anarec) regarding significant price hikes driven by geopolitical tensions in the Middle East, specifically the closure of the Strait of Hormuz, which has pushed Brent crude prices above $100 per barrel. In response, the International Energy Agency (IEA) is releasing 400 million barrels from strategic reserves to stabilise supply.
Unleaded petrol is now also covered by this reduction in tax rates.
With the expected rise in diesel prices, the Government has decided to apply a new temporary and extraordinary reduction in the unit rates of the Tax on Petroleum and Energy Products (ISP) applicable to diesel and unleaded petrol in mainland Portugal, as both have risen by more than ten cents compared to the week before the attack on...
Starting Monday, ISP tax rates on road diesel and unleaded petrol will be reduced again as an extraordinary and temporary discount of 1.4 and 2.7 cents per litre, respectively.
The article reports that Portugal has reduced fuel taxes to help limit rising fuel prices at the pump.
The association of fuel retailers reported few instances of fuel shortages due to increased demand in anticipation of rising prices at petrol stations. However, it presents a fiscal challenge to the Government.
The Portuguese government has announced an “extraordinary and temporary” tax reduction of 3.55 cents per liter on fuel, aimed at mitigating the impact of rising fuel prices driven by increased global oil prices amid the conflict in the Middle East. The recent surge in oil prices, with Brent crude surpassing $87 and potentially reaching $120, has led to record-high fuel costs in Portugal, with gasoline reaching over 2 euros per liter in some stations. Despite the tax cut, fuel prices remain high, and in Galicia, some stations are among the most expensive in Spain. The measure seeks to offset the additional VAT revenue from rising prices and provide relief to consumers during this period of geopolitical instability.
