Taxes in Portugal

Sun, sand and beautiful sceneries, what more could you ask when moving to a country? Taxes in Portugal is also one of the more generous ones in Europe and it has quickly become a very popular destination for expats from the UK and other countries to migrate to. Taxes in Portugal work differently for both residents and non-residents. The rate of personal income tax in Portugal is below the national average of its neighbour EU countries.

Taxes in Portugal

Taxes in Portugal

Residents

All residents in Portugal must pay income tax, although it is a lot lower than it’s neighbouring countries. This income can include, salary, capital gains, rental income etc.  Portugal also has many tax treaties to prevent individuals paying double tax. But how do you know if you’re classified as a tax paying resident? It’s is quite simple really, if you have been staying in Portugal for 183 days or more and you qualify as a tax paying resident. It is important to correctly submit your Portuguese tax returns on time or it can be very costly. Penalties for late filing start at €200, but can increase to €2,500. They can also range from 10% to double the amount owed but are capped at €55,000. So it is important you pay on time!

Below you can see the tax brackets for Income tax in Portugal, and the lower rates it has in comparison to the UK.

From (Portugal)To (Portugal)Tax rateIncome of Individual (UK)Tax rate
€ 0€ 7.00014.5%Up to £ 11,0000%
€ 7.001€ 20.00028.5%£ 11,001 to £ 43,00020%
€ 20.001€ 40.00037%£ 43,001 to £ 150,00040%
€ 40.001€ 80.00045%£ 150,000 <45%
€ 80.001€ 80.001+48%

Non residents

Non residents in Portugal only must pay a tax for income that is earnt in the country and is typically 20%. Lower tax rates are also paid for income received from property. No inheritance tax, gift tax or wealth tax should be paid in Portugal for non-habitual residents. If you are planning on staying in Portugal for over 183 days you will then become a tax resident and may have to sort out a visa. Find out more information about visas on our other page.

Tax in Portugal

Income tax returns in Portugal

If you are a Portuguese tax resident you must submit an annual income tax return. The date at which you must submit the income tax annual return is dependant on the type of income you receive. If you receive an income as an employee, the tax return deadline is March 15th in the year following the tax return. Tax returns for an income from any other sources should to be submit by April 30th the following year.

To register as a tax payer in Portugal you must fill out a registration form (ficha de inscricao) which you can find on their website and then take it to your local tax office. You can also find this form and download it online. After complete you must take it to your closest tax office which can be found online.

Are you are thinking about moving to Portugal? Find out more information about living in Portugal on our other pages.