💰

Taxation

Overview of national tax policies, including income tax, VAT, and corporate taxes.

Sections

Taxation in Portugal

1. Types of Taxes

  • Personal Income Tax (IRS): Progressive rates ranging from 14.5% to 48% based on income brackets.
  • Corporate Tax (IRC): Standard rate of 21% for resident companies; reduced rates for small businesses and certain sectors.
  • Value Added Tax (VAT): Standard rate of 23%, with reduced rates of 13% and 6% for specific goods and services.
  • Property Tax (IMI): Ranges from 0.3% to 0.8% of the property’s tax value, depending on the municipality.
  • Capital Gains Tax: Generally taxed at 28% for individuals; specific rules apply for residents and non-residents.

2. Residency and Taxation

  • Tax Residency: Individuals are considered tax residents if they spend more than 183 days in Portugal or have a permanent residence.
  • Non-Habitual Resident (NHR) Regime: Offers tax benefits for new residents, including a flat 20% rate on certain income types and exemptions on foreign income for ten years.

3. Filing and Payment Procedures

  • Tax Year: Aligns with the calendar year (January 1 to December 31).
  • Filing Deadlines:
    • IRS: Typically from April 1 to June 30 of the following year.
    • IRC: Generally due by May 31 of the following year.
  • Payment: Taxes can be paid online through the Portuguese Tax Authority (Autoridade Tributária e Aduaneira) website or at designated banks.

4. General Costs

  • IRS Rates: Progressive; for example, income up to €7,112 is taxed at 14.5%, while income over €80,000 is taxed at 48%.
  • Corporate Tax: 21% on profits; reduced rates may apply for small businesses (up to €15,000 profit taxed at 17%).
  • IMI: Varies by municipality; check local rates for specific properties.

5. Country-Specific Considerations

  • Double Taxation Agreements: Portugal has treaties with many countries to avoid double taxation on income.
  • Social Security Contributions: Employees contribute around 11%, while employers contribute approximately 23.75%.
  • Tax Incentives: Various incentives exist for investment in specific sectors, such as renewable energy and technology.

6. Resources for Further Information

7. Consultation

  • Consider consulting a tax advisor or accountant familiar with Portuguese tax law for personalized advice, especially regarding the NHR regime and international tax implications.