Latest news and stories about tax law in Portugal for expats and residents.
The Central Administrative Court South has ruled that the sale of inherited properties before the estate is divided is subject to capital gains tax. This decision contradicts a previous stance by the Supreme Administrative Court, which generally exempted undivided inheritances from such taxation.
The Tax Authority (Autoridade Tributária e Aduaneira or AT) has ruled that delays in municipal licensing do not justify extending the 36-month deadline for reinvesting capital gains from a primary residence. This means taxpayers who fail to complete a new home purchase within the legal timeframe due to bureaucratic delays will still face Personal Income Tax (Imposto sobre o Rendimento de Pessoas Singulares or IRS) on those gains. Tax-paying residents should note that the AT maintains a strict interpretation of the law regardless of external delays.
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.
Capital gains (mais-valias) are the profits earned from selling an asset, such as a home, for a higher price than it was bought. In Portugal, residents can often avoid paying tax on these gains if they reinvest the full sale proceeds into a new primary residence within 36 months. The Tax Authority (Autoridade Tributária) recently confirmed this deadline is absolute and does not account for external delays like slow building permits.
The Portuguese Communist Party (PCP) is seeking to ban the State from using arbitration to resolve tax disputes, arguing it creates an unfair double standard for large-scale debtors compared to ordinary citizens.
Tax authorities have ruled that homeowners cannot claim capital gains tax exemptions for selling property within one year of purchase if the household expansion, such as the birth of a child, occurred prior to the property acquisition.
The Portuguese Episcopal Conference, led by Bishop José Ornelas, has condemned the taxation of compensation payments made to victims of sexual abuse within the Catholic Church, labeling the practice as ethically unacceptable.
The Portuguese Tax Authority has clarified that young people under 35 are ineligible for first-home tax exemptions if they already own shares in residential properties, regardless of whether those shares were acquired through inheritance or donation.
The Supreme Administrative Court has ruled against taxing capital gains from the sale of undivided inheritances under personal income tax, yet the Tax and Customs Authority continues to challenge this stance, creating ongoing fiscal uncertainty for taxpayers.
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%.
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...
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.
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.
Compensation payments for sexual abuse are not subject to IRS (personal income tax) in Portugal.
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...
The PCP voted against. Livre and the IL abstained.
Fact-check regarding the tax rate applied to foreign pensions for emigrants returning to Portugal.
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.
Francisco Castro Guedes has begun a new professional phase: he has been promoted to Tax Law partner at SRS Legal. He reveals to Advocatus that this is an opportunity to consolidate and develop tax litigation and deepen relationships with clients. The lawyer stresses that it is essential to support companies not only in the litigation phase but also...
Luís Leon suggests that if victims of abuse in the Church do not claim the amount, the State could profit through income tax, as settlement compensations are subject to standard tax rates.
FIFA did not reach an agreement with the US Government to reduce tax burdens for nations participating in the 2026 World Cup. Portugal has had an agreement in place since 1995 to avoid double taxation.
The taxation of the sale of properties belonging to undivided inheritances remains shrouded in legal and fiscal uncertainty. While the Supreme Administrative Court (STA) has been ruling against the application of capital gains tax in these operations, the Tax and Customs Authority (AT) maintains a divergent interpretation and warns of the possibility of taxation in...
The 1.6 million euros paid as 'reparation' are not exempt from taxes. In some cases, the financial compensation could be cut to half of the communicated value.
The 1.6 million euros paid as 'reparation' are not exempt from taxes. In some cases, the financial compensation could be cut to half of the communicated value.
Donations raised within the scope of a public petition are not subject to VAT, provided there is no associated consideration and they do not fall under an economic activity of the beneficiary. This position is stated in a binding information issued by the Tax and Customs Authority (AT) on March 31, 2026, and published on the Finance portal this Monday.
Sérvulo & Associados announces the promotion of Ana Moutinho Nascimento to equity partner and Joana Pinto Monteiro to salaried partner. “These promotions reflect the recognition of the merit, dedication, and technical excellence of both lawyers, as well as SÉRVULO's commitment to continue providing high-quality legal services.”
Real estate developers who proceeded with construction projects at a 6% VAT rate, supported by declarations issued by municipalities, are preparing to demand in court that the municipalities take responsibility for the high amounts now being demanded by the tax authorities. Read about this and other top stories in the national press this Tuesday. Developers are filing lawsuits against city councils.
Pragma Advogados has strengthened its team with partner and Tax department coordinator Ricardo Codeço. The lawyer moves from JPAB – José Pedro Aguiar-Branco Associados. “I am very happy and see this new challenge as an opportunity to actively contribute to the growth and consolidation of the Tax Law area at Pragma Advogados, reinforcing...”
With the desire to create a “highly specialised” legal project, focused on taxation and tax litigation, and “based on technical rigour” and “critical capacity”, António Gaspar Schwalbach decided to launch Spear Legal. The name stems from the idea of a spear – an instrument that combines strength, precision and direction, and it is this triad that inspires the identity.
Non-resident taxpayers in Portugal are subject to stricter rules regarding capital gains tax on real estate, being excluded from significant tax benefits such as the reinvestment scheme for primary and permanent residences, according to a recent binding ruling from the Tax Authority (AT) published on the Finance Portal. The interpretation comes in response to a...
Most of the cases are currently in the appeal phase. Court decisions may take between three to 15 years.
The annual income tax return for 2026, with a filing deadline starting on April 1st, will undergo changes. The tax authority has updated the Model 3 form and several annexes, introducing modifications that reflect the new Youth IRS regime, changes to capital gains taxation, and new codes for exempt income. The new rules apply to tax returns...
