Tax benefits news in Portugal

The Tax and Customs Authority (Autoridade Tributária e Aduaneira or AT) has evaluated 31 of the approximately 540 existing tax benefits in Portugal. Director-General Helena Borges stated that the agency is currently assessing another ten incentives to determine their ongoing effectiveness.

The government has implemented a new tax package for housing, including a reduction in the value-added tax (Imposto sobre o Valor Acrescentado or IVA) on construction from 23% to 6% and a decrease in the personal income tax (Imposto sobre o Rendimento das Pessoas Singulares or IRS) on rental income to 10%. These measures, which aim to increase housing supply and support tenants, apply retroactively to the beginning of the year. Additionally, the annual deduction limit for rent paid under the IRS has increased from 700 to 900 euros.

Cancer patients can now request corrections to their personal income tax (Imposto sobre o Rendimento das Pessoas Singulares or IRS) returns for previous years. This follows a Supreme Court ruling favoring taxpayers whose disability ratings were reassessed below 60%, with the government confirming the issue is now resolved.

The Tax Authority (Autoridade Tributária e Aduaneira or AT) will restore benefits to taxpayers whose disability ratings were reviewed to below 60% before the end of 2023. This decision follows recent court rulings that challenged the progressive loss of tax benefits for individuals with disabilities.