Latest news and stories about tax deductions in Portugal for expats and residents.
Parliament approved a measure doubling personal income tax (Imposto sobre o Rendimento de Pessoas Singulares or IRS) deductions for families from the third child onwards. Lawmakers also voted to increase support under the Child Guarantee (Garantia para a Infância) to match the larger tax allowances for dependents. The change aims to provide targeted financial relief for larger households facing increased living costs.
Tenants will be able to deduct up to €1,000 in housing rent from their personal income tax (Imposto sobre o Rendimento de Pessoas Singulares or IRS) in 2027, up from the current €900 limit. The government proposal maintains tax exemptions on workplace productivity bonuses up to 6% of annual base pay for companies raising salaries by 4.5%. The draft budget also updates the threshold for the high-earner solidarity surcharge (taxa de solidariedade), linking it to the ninth tax bracket.
Update: Budget Expands IRS Relief and Cuts Corporate Tax Rate
Finance Minister Joaquim Miranda Sarmento detailed additional tax measures in the draft budget, proposing a 3.88% update to IRS brackets and rate cuts across the first six brackets. The proposal also reduces the corporate income tax (Imposto sobre o Rendimento das Pessoas Coletivas or IRC) rate by one percentage point, raises the annual subsistence threshold to €13,580, and provides a €50 monthly pension increase.
Portugal’s house prices have risen faster than the EU average since 2020, and recent reports list Portugal among the countries with the largest price increases over that period. That stronger price growth has worsened affordability in Lisbon and Porto in particular, so prospective buyers and renters should check local indices and mortgage costs before deciding.
Joaquim Miranda Sarmento is Portugal's Finance Minister in the AD government led by Luís Montenegro. An economist and professor at ISEG (Lisbon School of Economics & Management), he served as PSD parliamentary group leader before joining the government.
As Finance Minister, he oversees the state budget, tax policy, public debt management, and fiscal relations with the EU. His decisions on tax brackets, IRS withholding tables, housing incentives, and public spending directly affect residents' cost of living and investment climate.
The corporate income tax (Imposto sobre o Rendimento das Pessoas Coletivas or IRC) is a tax levied on the profits of companies operating in Portugal. It applies to both resident entities and non-resident entities with income generated within the country.
During the 32nd CDS-PP congress, parliamentary leader Paulo Núncio announced the party will propose doubling tax deductions for families with three or more children. The measure aims to provide greater support to large families and address the country's declining birth rate.
The CDS–PP is the Democratic and Social Centre – People's Party (Centro Democrático e Social – Partido Popular), a small centre-right, Christian-democratic party founded in 1974. It often partners with the larger PSD in parliament; in February 2026 it voted with the PSD and IL to approve a housing package, so its parliamentary support can influence housing and other policy outcomes.
The government has issued a new ordinance updating the rules for Annex H of the personal income tax (Imposto sobre o Rendimento das Pessoas Singulares or IRS) return to include expenses related to domestic work. Although this tax benefit was legally established last year, previous regulations failed to cover it. The update corrects this administrative oversight, allowing taxpayers to claim these deductions in their current filings.
The IRS withholding tables (tabelas de retenção na fonte) are government-published schedules that determine how much personal income tax (Imposto sobre o Rendimento das Pessoas Singulares — IRS) employers must deduct from each paycheck. They take into account gross pay, marital status, number of dependents, and disability status.
The tables are updated annually (and sometimes mid-year when budgets change), directly affecting monthly take-home pay. When tables are revised downward, workers see more in their pay packet; when raised, less. Any difference between amounts withheld and the actual tax owed is settled when the annual IRS return (Modelo 3) is filed, typically between April and June.
Employees and pensioners should check the current tables — published by the Autoridade Tributária e Aduaneira (AT) — whenever they change, as the impact on net income can be significant.
Taxpayers have until the end of today to dispute expense values on the Finance Portal (Portal das Finanças) before the income tax (IRS) filing period begins on Wednesday. The President of the Republic also approved the expansion of the automatic tax return (declaração automática) to include more young taxpayers under the revised Youth IRS (IRS Jovem) rules. Experts warn that changes to withholding tax (retenção na fonte) tables last year may result in smaller refunds for many households.
IRS Jovem is a tax benefit that provides a partial exemption on employment income for young workers aged 18 to 26 during their first five years of work. It helps young professionals retain more of their earnings by reducing their income tax (Imposto sobre o Rendimento de Pessoas Singulares) liability. As of 2024, these taxpayers are eligible for the automatic tax return system, simplifying the annual filing process.
The Portal das Finanças is Portugal's official online tax platform, operated by the Autoridade Tributária e Aduaneira (AT — Tax and Customs Authority). It is where individuals and businesses file tax returns, check tax records, make payments, and manage their fiscal affairs.
Key functions include filing the annual IRS return (Modelo 3), accessing e-invoices (e-fatura), consulting property tax (IMI) records, requesting tax residency certificates, and paying outstanding tax debts. Access requires a NIF (tax identification number) and a password or digital key.
The portal is essential for anyone living or working in Portugal. Residents should be aware that scam messages impersonating the AT are common — always access the portal directly at portaldasfinancas.gov.pt rather than through links in emails or SMS.
Taxpayers have until Tuesday, March 31, to contest the value of expenses recorded by the tax authority for 2024 income. Residents should check the Portal das Finanças to verify that health, education, and general family expenses are correctly listed before the official tax filing period begins on April 1. This is the final opportunity to ensure all tax deductions (deduções à coleta) are accurately applied to the upcoming IRS return.
The Portal das Finanças is Portugal's official online tax platform, operated by the Autoridade Tributária e Aduaneira (AT — Tax and Customs Authority). It is where individuals and businesses file tax returns, check tax records, make payments, and manage their fiscal affairs.
Key functions include filing the annual IRS return (Modelo 3), accessing e-invoices (e-fatura), consulting property tax (IMI) records, requesting tax residency certificates, and paying outstanding tax debts. Access requires a NIF (tax identification number) and a password or digital key.
The portal is essential for anyone living or working in Portugal. Residents should be aware that scam messages impersonating the AT are common — always access the portal directly at portaldasfinancas.gov.pt rather than through links in emails or SMS.
The Minister of Health, Ana Paula Martins, told Parliament the National Health Service (Serviço Nacional de Saúde or SNS) had a negative balance of €1.035 billion and a debt to external suppliers of €1.51 billion, while waiting lists and numbers without a family doctor have risen. The report says more consultations and surgeries are being done but financial and staffing pressures persist, with particular strain in some specialties and emergency care. Residents relying on public care should expect continued delays as authorities address funding and staffing gaps.
Ana Paula Martins is a Portuguese pharmacist and politician who has served as the Minister of Health in Portugal since April 2024. A member of the Social Democratic Party (PSD), she was reappointed to the position in the second government of Prime Minister Luís Montenegro in June 2025.
Professional Background
Pharmaceutical Leadership: She served as the President of the Order of Pharmacists (Bastonária da Ordem dos Farmacêuticos) from 2016 to 2022.
Hospital Management: She was the President of the Board of Directors of Hospital de Santa Maria (CHULN) in Lisbon from December 2022 to January 2024.
Academic Work: She holds a PhD in Clinical Pharmacy and has been an assistant professor at the Faculty of Pharmacy of the University of Lisbon for over 20 years.
Political Career
Government Role: As Minister of Health, she has overseen the implementation of the "SNS Emergency Plan" and recently addressed issues such as INEM staffing and public-private partnerships in healthcare.
Party Leadership: She served as Vice President of the PSD under Rui Rio (2021–2022).
Parliament: She was elected as a member of the Assembly of the Republic representing the Lisbon constituency in 2024.
