The headline rates of the Portuguese tax system are the standard 23% IVA rate on the mainland, the 19% general IRC rate plus municipal derrama, and 28% withholding on dividends and securities gains. IRS brackets and contribution thresholds are revised every year.
IVA — Portuguese VAT
Rate
Mainland
Typical application
Standard
23%
General rule
Intermediate
13%
Restaurants and some food products
Reduced
6%
Essential goods, certain services
Rates in the Azores and Madeira are lower than on the mainland. The article 53
exemption waives IVA below an annual turnover threshold — the current figure
is in the table at the end of this page.
IRC — corporate income tax
Item
Value
General rate
19%
SMEs and small mid caps
15% on the first €50,000 of taxable income
Municipal derrama
Up to 1.5%, varies by municipality
State derrama
Bands on higher profits
Payments on account
Three, in July, September and December
IRS — personal income tax
IRS is progressive, by bands of taxable income; for couples who file jointly,
the conjugal quotient splits their income in two. The bands are revised each
year in the Portuguese budget act.
Investment income and capital gains
Income
Usual treatment
Dividends, residents
28% final withholding, option to elect englobamento
Dividends, non-residents
Withholding under the applicable treaty
Securities gains
28% special rate, option to elect englobamento
Property gains
50% of the gain is taxed at the general progressive IRS rates — same regime for residents and non-residents
For non-residents, income earned outside Portugal is taken into account only to
determine the rate applying to the gain: it is not itself taxed in Portugal.
Only the property gain subject to Portuguese tax is.
Segurança Social
Self-employed workers contribute quarterly on relevant income, after an
exemption during the first twelve months of activity, subject to conditions.
Employers pay monthly contributions.
How to use this page
This page is a reference. It does not replace a review of your own situation:
rates apply differently depending on your regime, your tax residence and the
nature of the income.
