Portugal Tax Rates

Income Tax Brackets

Portugal's personal income tax (IRS - Imposto sobre o Rendimento das Pessoas Singulares) is levied on a progressive scale with nine brackets, ranging from 14.5% on taxable income up to €7,703 to 48% on income exceeding €81,199. An additional solidarity surcharge (taxa adicional de solidariedade) of 2.5% applies to taxable income between €80,000 and €250,000, and 5% on income above €250,000, effectively raising the top marginal rate to 53% for the highest earners. Married couples may opt for joint or separate taxation. Employment income is subject to monthly withholding at source, and annual tax returns must be filed to reconcile amounts owed or refundable.

Corporate Tax

Portugal's corporate income tax (IRC - Imposto sobre o Rendimento das Pessoas Coletivas) is levied at a standard rate of 19% on taxable profits as of 2026, reduced from 21%. Small and medium-sized enterprises (SMEs) benefit from a reduced rate of 15% on the first €50,000 of taxable income, with the standard 19% rate applying to profits above that threshold. A municipal surcharge (derrama municipal) of up to 1.5% may be levied by local authorities on taxable profits. Additionally, a state surcharge (derrama estadual) applies to taxable profits exceeding €1.5 million: 3% on profits between €1.5 million and €7.5 million, 5% on profits between €7.5 million and €35 million, and 9% on profits exceeding €35 million.

Capital Gains Tax

Capital gains in Portugal are generally taxed at a flat rate of 28% for individuals. Gains from the sale of real estate are added to 50% of the taxpayer's other income and taxed at the applicable progressive IRS rates, unless the taxpayer opts for the flat 28% rate. For securities (shares, bonds, and other financial instruments), gains are taxed at the flat 28% rate, though taxpayers may elect to aggregate these gains with other income and be taxed at the progressive rates if this results in a lower tax liability. Non-residents are generally exempt from capital gains tax on the sale of Portuguese securities, except for gains on shares in companies whose assets are predominantly composed of Portuguese real estate.

VAT / Sales Tax

Portugal's value-added tax (IVA - Imposto sobre o Valor Acrescentado) applies at a standard rate of 23% on most goods and services. An intermediate rate of 13% applies to certain food and beverage products, agricultural inputs, and restaurant and catering services. A reduced rate of 6% applies to essential goods and services including basic foodstuffs, pharmaceutical products, books, newspapers, passenger transport, hotel accommodation, and certain cultural events. The Autonomous Regions of Madeira and Azores benefit from lower IVA rates: Madeira applies rates of 22%, 12%, and 5%, while the Azores applies 16%, 9%, and 4% respectively.

Cryptocurrency Tax

Since January 1, 2023, Portugal taxes cryptocurrency gains under specific rules. Short-term capital gains from the disposal of crypto assets held for less than 365 days are taxed at a flat rate of 28%. Gains from crypto assets held for 365 days or longer are exempt from taxation, providing a significant incentive for long-term holding. This applies to gains from selling, exchanging, or otherwise disposing of crypto assets. Income earned from crypto mining or validation activities is treated as self-employment income (Category B) and taxed at the progressive IRS rates. Crypto-to-crypto swaps are considered taxable events if the holding period of the disposed asset is less than 365 days.

Tax Treaties

Portugal has an extensive network of approximately 80 double taxation treaties in force, covering most major trading partners and investment sources. These treaties generally follow the OECD Model Tax Convention and aim to prevent double taxation of cross-border income, reduce withholding tax rates on dividends, interest, and royalties, and provide mechanisms for resolving tax disputes. Portugal's treaty network is particularly strong with EU member states, Portuguese-speaking countries (CPLP nations including Brazil, Angola, and Mozambique), and major global economies. The treaties typically reduce withholding tax rates on dividends to 10-15%, interest to 10-15%, and royalties to 10%.

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