Taxes in Portugal
Tax status of Non-Habitual Residents (NHR)
Since 1992 Feod Group has been providing a wide range of immigration, business and legal services in Portugal and other EU countries
✓ Tax planning and tax optimization
✓ Comparison of taxation by jurisdictions of interest (EU, USА and UK)
✓ Corporate and personal taxes in Portugal: income tax, property taxes, VAT, corporate tax
Tax resident in Portugal
Portugal has a competitive tax system that attracts a large number of professionals and entrepreneurs. Portugal also belongs to low-tax jurisdictions.
According to Portuguese tax law, an individual is considered to be tax resident in Portugal if he meets one of the following conditions:
– Spends more than 183 days in Portugal (consecutive or not) in a 12-month period beginning or ending in the respective financial year.
– Stays in Portugal for a shorter period, but the individual has a real estate object in Portugal that is used for living.
What is the difference between tax resident and non-resident in Portugal?
⇒ By becoming a tax resident in Portugal, you will pay Portuguese tax on all your income from sources around the world.
⇒ Non-residents will be subject to Portuguese tax only on income derived from Portuguese sources.
Taxes in Portugal
Please note that the rate of fees and taxes in the Portuguese mainland is different than in the Free Economic Zone of Madeira and in the Autonomous Region of the Azores.
|Taxes in Portugal for individuals|
|Personal income tax in Portugal|
• Portuguese tax residents are subject to income tax on their worldwide income at a progressive rate of 14.5% to 48%.
Non-residents are taxed at a flat rate of 25% on their taxable remuneration in 2022.
• According to the Non-Habitual Residents (NHR) regime
A flat rate of 20% for certain income from Portuguese sources, compared to a progressive rate of up to 48% applied under the general income tax regime.
• Additional solidarity rate
Varies from 2.5% to 5%, applies to taxpayers with taxable income in excess of EUR 80,000.
|Inheritance and gift tax|
0.8% Portuguese mainland
0% – Madeira
|Capital gains tax|
Capital gains tax applies to the sale of assets and only applies to income earned from real estate and investments.
Capital gains tax in Portugal will depend on your resident status and how you own the asset and whether it is your primary home.
|Property taxes in Portugal|
|Property transfer tax (IMT – Imposto Municipal sobre as Transmissões Onerosas de Imóveis).|
The rate is from 0% to 8% depending on the criteria.
The following three criteria are important for calculating this tax:
– Type of property: Urban or rural
– Location: Mainland Portugal or its autonomous regions (Madeira, Azores)
– Purpose of purchase: Primary or secondary residence.
|Stamp duty on the transfer of real estate (Imposto de Selo) – from 0.4% to 0.8% of the value of the property.|
The rate varies depending on the type and value of the property.
|Municipal annual property tax (IMI – Imposto Municipal sobre Imóveis).|
The tax rate is from 0.3% to 0.8% depending on the municipality and type of property. For real estate located in urban rehabilitation areas, or built more than 30 years ago, there is a tax exemption for 3 years.
Tax status of Non-Habitual Residents (NHR)
For new residents, Portugal provides the Non-Habitual Resident program.
Under the terms of the NHR (Non-Habitual Resident) program, new residents are exempt from taxes for 10 years on most types of personal income that come from a foreign source or that are taxed in another country.
Benefits of Non-Habitual Residents (NHR) tax status:
✓ Portugal is on the EU tax white list.
✓ Exemption from almost all taxes on foreign sources of income (for example: rental income, investment income, capital gains, interest, dividends) – these amounts can be excluded from tax liability subject to double tax treaties.
✓ A flat rate of 20% for certain income from Portuguese sources (from certain professions and from self-employment), compared to a progressive rate of up to 48% applied under the general income tax regime.
✓ Pensions from foreign sources are subject to taxation at a flat rate of 10%.
✓ 0% tax on gifts, inheritance and wealth.
Requirements for obtaining NHR tax status in Portugal
– To apply for special tax status, you must be legally resident in Portugal. This may be obtaining a residence permit on a D7 visa without investment (as a financially independent foreigner); or a residence permit for investment (Golden Visa); Residence permit through business immigration to Portugal; Registration of a company in Madeira, etc.
– The applicant must not have been tax resident in Portugal for 5 years prior to submitting the application.
– The applicant must confirm the place of residence in Portugal, for example, by purchasing a property or confirming a lease for more than 12 months.
Corporate taxes in Portugal
Companies are considered tax residents in Portugal if they are registered in Portugal or if their activities are managed from the territory of Portugal.
1. Corporate tax in Portugal
– The standard income tax rate is 21% and applies in mainland Portugal.
– In the autonomous region of Madeira and in the autonomous region of the Azores – the standard income tax rate is 14.7%.
– A reduced income tax rate of 17% applies in mainland Portugal on the first €25,000 of taxable income.
– A reduced corporate tax rate of 5% applies in Madeira until the end of 2027. A 5% rate applies to profits derived from transactions carried out exclusively with non-resident organizations or with other companies operating under the Madeira IBC (Madeira International Business Center).
– standard rate of 23% (22% in the Autonomous Region of Madeira and 18% in the Autonomous Region of the Azores)
– an intermediate rate of 13% (12% in Madeira; 9% in the Azores)
– and a reduced rate of 6% (5% in Madeira; 4% in the Azores).
3. Contributions to the Social Security Fund – the standard rate of 23.75% of the salary of employees.
⇒ How to register a company in Portugal and Madeira: features and benefits of business taxation in Madeira»
Feod Group Services
Comparison of taxation in different EU countries. Effective international tax planning and tax optimization.
🔹 Obtaining a Portuguese tax number – NIF
🔹 Opening a personal and corporate bank account in Portugal
🔹 Registration of companies in Portugal and Madeira
Buying property in Portugal
🔹 Obtaining a residence permit in Portugal: D7 visa without investment (as a financially independent foreigner); Residence permit for investment (Golden Visa); Residence permit through business immigration to Portugal; family reunification.
🔹 Enrollment of children in schools, colleges and universities in Portugal and EU countries
Taxes in Portugal - FAQ
How many taxes do you have to pay in Portugal?
Taxes in Portugal depend on your tax residency status, individual circumstances, and the basis for benefits.
If you are a tax resident of Portugal, you must file a declaration and pay taxes in Portugal on all your income.
Non-residents are taxed only on income derived from a source in Portugal.
What is the tax in Portugal for individuals?
Tax in Portugal for individuals operates at a progressive rate from 14.5% to 48%.
What are the benefits of special NHR status in Portugal?
The status of Non-Habitual Residents exempts new residents of Portugal from taxation of most types of income received abroad.
The tax status is valid for 10 years.
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