Portugal tax guide 2026

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 VAT 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, with a family quotient. 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.

IRS bands — Figure to be confirmed by a contabilista certificada. Official bands — Código do IRS, article 68