Tax law news in Portugal

IMT Jovem: property inheritances and donations prevent access to home purchase exemption

Supreme Court blocks tax on undivided inheritances, but Tax Authority maintains standoff

Pragma Advogados integrates Fernando Fontes to strengthen Tax Law practice

Pragma Advogados announces the integration of Fernando Fontes as Of Counsel in the Tax Law department. With a career built across three dimensions — Tax Administration, legal practice, and academia — Fernando Fontes joins Pragma. Before entering legal practice, he served for over two decades at the Tax and Customs Authority, where he worked...

PSD wants 6% VAT on urban rehabilitation areas effective from 2008

PRESS REVIEW || Construction contracts may be subject to a reduced rate provided they are located in an Urban Rehabilitation Area, without the requirement of an approved Urban Rehabilitation Operation. If the bill is passed, it will end ongoing tax inspections and resolve the standoff between the Tax Authority and taxpayers.

Court concludes IMT exemption for corporate restructuring

The decision follows the opposition of the company Nova Iberomoldes to the tax, claiming that the action of the Tax and Customs Authority is contrary to a European directive.

Sold your car but didn't update the registration? Supreme Court rules that the new owner pays the vehicle tax

If a car is registered with the Institute for Mobility and Transport (IMT) in someone's name, but the owner – the holder of the property rights – is someone else, because they acquired the vehicle, signed a leasing contract, or received it as a gift and have not yet updated the state registration, the taxes and...

VAT group regime declaration applies from 1 July

The VAT group regime was created at the end of last year by Law no. 62/2025 and will allow economic groups that own multiple companies to consolidate their VAT balances.

Uncertainties regarding the taxation of the assignment of hereditary shares under personal income tax

For years, the personal income tax (IRS) treatment of the onerous assignment of hereditary shares generated contradictory positions. The Tax Authority (AT) argued for taxation in cases where the acquirer gained control over the inheritance's real estate assets, treating the operation similarly to the disposal of a hereditary share. Conversely, the majority of case law rejected this approach...

Portugal, paper reforms. In Spain, Shakira's dance

Montenegro says he is reforming, but lives in a 'blinking light' state. Meanwhile, Shakira is dancing circles, not just around her fans, but also around the Spanish tax authorities.

Shakira acquitted of tax fraud. Spanish tax authorities must refund her over 60 million euros

The Spanish Supreme Court has acquitted Colombian singer Shakira of tax fraud charges and annulled a 55 million euro fine imposed in 2021, according to a court document cited by Reuters. Following an appeal by the artist, the court ordered the Spanish tax authorities to refund her more than 60 million euros, including interest. The judge ruled that authorities failed to prove Shakira spent more than 183 days in Spain in 2011, a legal requirement for tax residency. This ruling does not affect subsequent tax years. While the tax office argued her relationship with Gerard Piqué established her center of activity in Spain, the court found the fines illegal due to the lack of proof regarding her 2011 residency. The tax office intends to appeal the decision and will withhold payment until a final verdict. Shakira's lawyer, José Luis Prada, welcomed the ruling, while the singer expressed hope that it sets a precedent for ordinary citizens facing similar systemic abuses.

Sandra Aguiar is the new partner at RPBA – Ricardo da Palma Borges & Associados

RPBA – Ricardo da Palma Borges & Associados has strengthened its team with the arrival of Sandra Aguiar as a partner, in a hiring that marks another step in the growth strategy of the boutique firm specialising in tax law, according to a statement from the office. With over 20 years of experience at KPMG Portugal and Angola, Sandra...

Constitutional Court complicates calculations for non-habitual residents

The Constitutional Court has struck down the ordinance that classifies highly qualified activities eligible for the income tax bonus for foreigners or former emigrants. It is now up to Parliament to resolve the issue.

Portugal’s ICE regime two years on: key developments and practical insights

International Tax Review14 May

SRS Legal strengthens Tax team with Salomé Corte-Real

SRS Legal has integrated Salomé Corte-Real as a partner in the Tax Law department of its Porto office. The lawyer joins from Vieira de Almeida. “Salomé's integration represents a significant step in the development of the SRS Legal office in Porto and in the consolidation of a multidisciplinary team integrated into its national structure.”

Businessman declares Aventador a company car. And gets away with it!

Company cars range from luxury sedans to commercial vans, but this businessman tried to declare a Lamborghini Aventador as his company vehicle. And he succeeded, thanks to an old Ferrari.

Tax authority forced to refund overcharged VAT on renovation work

An unprecedented arbitration ruling has annulled an additional tax assessment by the tax authority, which, following an inspection, applied a 23% VAT rate to an urban renovation project despite having initially informed the company that it was eligible for the 6% rate.

Tax authority limits corporate income tax benefit for rent support

The tax authority has restricted the scope of extraordinary rent support granted to companies by determining that the corporate income tax (IRC) benefit cannot reduce the tax liability below 90% of what would be due without this mechanism, despite the measure allowing taxable income related to rent gains to be lowered to 87%.

Municipalities must pay corporate income tax on deposit interest

Interest from term deposits paid to local municipalities is subject to corporate income tax (IRC), with a mandatory 19% withholding tax that is final, according to a new binding information from the Tax Authority (AT), which restricts the scope of the tax exemption applicable to the public sector. At issue was a request for clarification regarding the mandatory nature of...

Constitutional Court rules against tax authority and extends capital gains tax exemption to homes built with credit

The Constitutional Court (TC) has declared unconstitutional a tax law interpretation that excluded taxpayers from capital gains tax exemptions if they used the proceeds from selling their home to pay off bank loans for building their own residence. The ruling is based on the principle of equality within the tax system.

Taxation of compensation for victims of abuse

The legislator should not construct reactive responses to singular situations, however serious they may be. Tax law requires coherence, stability, and respect for the principle of equality.

13h Sexual abuse compensation is exempt from income tax

Compensation payments for sexual abuse are not subject to IRS (personal income tax) in Portugal.

IRS: Tax authority cuts benefits following medical re-evaluations

The Tax and Customs Authority (AT) will implement a new model for reducing tax benefits for people with disabilities, which comes into effect for re-evaluations carried out from 2024 onwards and, in practice, leads to a progressive cut in tax deductions over four years. The new system replaces...

Rules on minimum corporate income tax and sanctions for omitting crypto-asset data approved in final vote

The PCP voted against. Livre and the IL abstained.

Is an emigrant returning to Portugal with a foreign pension taxed at 53%? - Polígrafo

Fact-check regarding the tax rate applied to foreign pensions for emigrants returning to Portugal.

Polígrafo17 Apr

Sifide via funds ends, but general regime remains in force until the end of 2026

The corporate income tax (IRC) benefit for research and development (R&D) investments made indirectly, known as Sifide II via funds, has ended. However, the general regime will remain in force for another year, until the end of 2026. The change, provided for in this year's State Budget, was submitted to the Assembly of the Republic.