Portugal taxes 2026: tax rates for expats and foreigners

How does the Portuguese tax system work

The Portuguese tax system rests on one rule: residents pay tax on worldwide income, non-residents only on income from Portugal. Everything is run by the Portuguese tax and customs authority, and almost all contact with it happens online through the tax portal, the taxpayer's personal account.

Every foreigner starts with a tax number: without it you cannot open a bank account or sign a lease. A tax number alone does not make you a tax resident.

There is no wealth tax and no separate inheritance tax, but the weight falls on work.

Compare taxes in 146 countries: relocation taxes 2026

When do you become a tax resident in Portugal

You can become a Portuguese tax resident long before your 183rd day in the country. Article 16 of the personal income tax code sets two independent tests, and either one is enough.

The 183-day rule. You are resident if you spend more than 183 days in Portugal, consecutive or not, in any 12-month period starting or ending in the tax year. It is a rolling window, not a calendar year, so splitting half a year here and half there across a year-end often fails.

A home and the intent to live in it. Even with fewer days you are resident if you had a home in Portugal that, judging by the circumstances, you meant to occupy as your habitual residence. A long-term lease in your name, a Portuguese address on your tax number record and children at a local school are already enough.

Residence from the day you arrive. Status is not assessed for the whole year but from the first day of stay: for the resident part of the year you report worldwide income, for the rest only Portuguese income. You will need to prove the arrival date and close your residence in the previous country.

A residence permit and tax status are different things. Tax residence arises from facts, even while the permit is still in the queue. If two countries both treat you as resident, the double tax treaty settles it by comparing, in order, your permanent home, centre of vital interests, habitual abode and nationality.

How to count days and avoid being resident in two countries at once is covered in our guide to tax residency and the 183-day rule. The routes for moving are on the Portugal residence permit page.

Portugal tax residency: how to become a resident and count the days

Portugal makes you resident if any 12 months that start or end in the tax year hold more than 183 days. The second route is a home you keep as your habitual residence: then days need not be counted.

Residency can start on the day of arrival, not on day 184. A resident pays progressive income tax on worldwide income, a non-resident only on Portuguese income. The status is confirmed by a certificate on the Portuguese Tax Authority portal.

Mistakes cost more: half a year here and half there across the turn of the year gives 184 days in a single window. Murblz support removes these risks: we count the rolling window, fix the start date of residency and obtain the certificate. We guarantee professional work and a transparent process, and in most cases a result on the first filing.

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What are the income tax rates in Portugal in 2026

Above $97,000 (€86,634) a year Portugal takes 48%, and with the solidarity surcharge the top marginal rate reaches 53%. That is the income tax scale for 2026, set by the State Budget Law No. 73-A/2025 of 30 December 2025.

The budget indexed the thresholds by 3.51% and cut the rates in brackets two to five by 0.3 points; the top rates did not change. The table applies to mainland Portugal.

More cuts may follow. On 17 September 2026 the Council of Ministers approved a bill for another cut, backdated to 1 January 2026: 12.2% instead of 12.5% in the first bracket, 15.2%, 20.7%, 23.6% and 30.6% in the second to fifth, and 34.6% instead of 34.9% in the sixth. Bracket thresholds and the rates in brackets seven to nine stay as they are, and the total saving for taxpayers is put at $450 million (€400 million). Parliament has the final word: until the law is passed and published, the rates in the table apply. If it passes, 2026 tax will be calculated at the new rates, and withholding will fall from the November salary and the Christmas payment.

How to calculate it. Multiply taxable income by the rate of its bracket and subtract the deductible amount in the last column. Example calculation in euros: on taxable income of 35,000, about $40,000, the tax is 35,000 × 34.9% - 4,209.94 = 8,005.06, about $9,000.

What reduces the base. Employment and pension income get a specific deduction: $5,200 (€4,587.09) in 2026, or 8.54 times the social support index. The index, used to set benefits and thresholds, is $610 (€537.13) in 2026. If your mandatory social security contributions are higher, the contributions are deducted instead.

The subsistence minimum. There is no personal allowance in the usual sense. Instead, the subsistence minimum means income up to $14,500 (€12,880) a year is effectively untaxed. That is the 2026 minimum wage of $1,100 (€920) times 14 payments: Portuguese salaries are paid 14 times a year, including holiday and Christmas pay.

Solidarity surcharge. The solidarity surcharge adds 2.5% on the slice of taxable income between $90,000 (€80,000) and $280,000 (€250,000) and 5% on anything above $280,000 (€250,000).

Couples and the islands. Married couples can file jointly: income is added up and halved before the scale is applied, which pays off when one partner earns much more than the other. The Azores and Madeira apply their own, lower income tax rates, set by the regional parliaments.

The blunt point: the 43.1% rate kicks in at just $49,000 (€43,090) of taxable income. By Western European standards that is a low threshold for a near-half rate, and it is what makes Portugal expensive for well-paid professionals.

How much tax is taken from a salary in Portugal

An employee on $45,000 (€40,000) a year gives the state about $14,000 (€12,500) and costs the employer $56,000 (€49,500). The gap between those figures and the rate table is social security, which relocation marketing rarely mentions.

Social security, the state insurance covering pensions, benefits and sick pay, takes 11% from the employee and 23.75% from the employer. There is no ceiling: contributions are due on the whole salary, whether $45,000 (€40,000) or $450,000 (€400,000). Spain and Germany cap the contribution base; Portugal does not.

Example calculation: a single mainland resident, no children, before tax credits.

Tax credits for health, education and housing take off a few hundred euros more but do not change the picture. On a $135,000 (€120,000) salary the gap between what the employee costs the company and what they take home is above 55%.

What IFICI changes. On a $45,000 (€40,000) salary tax at 20% comes to about $8,000 (€7,083) instead of $9,200 (€8,149), a saving of roughly $1,200 (€1,070) a year. On $135,000 (€120,000) it is about $24,000 (€21,360) instead of $46,000 (€40,547), a saving of some $21,400 (€19,000). The conclusion is plain: the regime pays off at high incomes and barely registers at average ones. Who can get it is covered in the IFICI section below.

What taxes do tech workers, freelancers and sole traders pay in Portugal

Most tech specialists who move to Portugal with a remote job pay tax on the standard scale of up to 48%. The non-habitual resident regime is closed, and IFICI is tied to an employer or project in Portugal, so remote work for a foreign company usually does not qualify.

The usual route is the Portugal digital nomad visa. Its income threshold is pegged to four minimum wages, which is $4,200 (€3,680) a month in 2026. Once you spend more than 183 days in the country or take a long-term lease you become resident, and your income is then taxed under one of three set-ups.

1. Employee of a foreign company. Salary falls into category A (employment income) and is taxed on the income tax scale. A foreign employer usually withholds nothing in Portugal, so the year's tax is paid in one sum after the return. Sort out social security in advance: it is the item people miss most often.

2. Self-employed. The Portuguese equivalent of a sole trader without a company. You register the start of activity on the tax portal, choose a profession code and issue green receipts, which are electronic invoices for services. Income goes into category B (business and professional income).

With turnover under $230,000 (€200,000) a year the simplified regime applies: only part of revenue is taxed, set by a coefficient. It is 0.75 for professions on the list in article 151 of the personal income tax code, 0.35 for other services and 0.15 for sales of goods. At the 0.75 and 0.35 coefficients, expenses equal to 15% of revenue must be evidenced: $5,200 (€4,587.09) or your social security counts automatically, the rest comes from invoices in the state electronic invoice system, to which sellers report receipts carrying your tax number. In the year you start, the coefficients are cut by 50%, and by 25% in the second year.

Self-employed social security is 21.4% of 70% of service income, with a quarterly declaration. No contributions are due for the first 12 months after you first open an activity. If one client provides 50% or more of your income, it pays an extra 7%, and 10% at 80% or more.

Value added tax. With turnover up to $17,000 (€15,000) a year you can work without charging value added tax under article 53 of the value added tax code. If your clients are businesses outside Portugal, value added tax on services is usually accounted for by the client under the reverse charge.

3. Your own company. At this level of income it costs more than the simplified regime: compare 34% above (with expenses of 15% of revenue evidenced) with 41% in the company example below, because dividends are taxed another 28%.

Up to and including age 35, the youth income tax regime gives a partial exemption on salary and self-employment income for 10 years. If you work with crypto, read our guide to crypto and taxes when relocating.

Can you still get the non-habitual resident regime, and who qualifies for IFICI

For ten years the non-habitual resident regime made Portugal a tax haven for retirees and freelancers. It is gone for newcomers: the 2024 State Budget, Law No. 82/2023, closed the regime, and the transition period ended in 2025. Those who obtained the status keep it until their ten years run out.

The replacement is IFICI, the tax incentive for scientific research and innovation, informally called the new non-habitual resident regime. It sits in article 58-A of the tax benefits statute, with the procedure set by ministerial order No. 352/2024/1.

Who can get IFICI. The benefit is tied to the job, not to a passport or an investment. It covers university teachers and researchers, specialists at certified start-ups and research centres, and highly qualified employees and directors of companies in an approved list of activities that export at least 50% of turnover. The lists are kept by the agency supporting small and medium-sized businesses and by the investment and foreign trade agency.

The application deadline. You apply to the tax authority by 15 January of the year after the year you became resident: move in 2026 and the deadline is 15 January 2027. Foreign income is exempt with progression: it is not taxed but counts when setting the rate on the rest of your income. Miss the deadline and the regime only starts from the year you register, while the ten-year clock is not extended.

A once-in-a-lifetime choice. IFICI can be used only once, and it is closed to anyone who has used the non-habitual resident regime or opted for the former residents regime (Article 12-A of the personal income tax code). The bar also works the other way: anyone who has benefited from IFICI loses the right to the youth income tax regime (Article 12-B of the personal income tax code). For a young specialist on an average salary the youth relief is often worth more, so run both numbers before applying.

The uncomfortable truth: IFICI is far narrower than the non-habitual resident regime. It gives retirees nothing, and as a rule it gives remote employees of foreign companies nothing either. Applications are checked against the job, the degree and the employer's activity code, so get confirmation before you move. Founders should also look at the Portugal start-up visa.

What taxes do foreigners and non-residents pay in Portugal

For the Portuguese tax office a passport means almost nothing: a foreign resident pays under the same rules as a Portuguese citizen, and a Portuguese citizen who has left pays as a non-resident. Tax residence is all that counts, so the first question on moving is not where your residence permit is but where your life is centred this year.

A non-resident pays only on Portuguese income, but at flat rates and with no family allowances: 25% on a salary or pension, however small. Article 71 of the personal income tax code gives two reliefs: no tax is withheld on the part of a salary from a single employer up to the minimum wage, $1,100 (€920) a month, and a pension is first reduced by the specific deduction of $5,200 (€4,587.09) a year. Foreign income is outside Portugal's reach, which is the key difference from residence.

Residents of other European Union and European Economic Area countries can ask for the tax to be recalculated on the resident scale, taking all their income into account. That pays off when total income is modest and the scale rate comes out below 25%.

A non-resident from outside the European Union and the European Economic Area (the European Union plus Norway, Iceland and Liechtenstein) needs a tax representative in Portugal unless they sign up for electronic notifications on the tax portal. Without one, tax notices simply do not reach you, while deadlines keep running.

Selling property. Since 2023 a non-resident, like a resident, is taxed on 50% of the gain, but the rate is set by reference to worldwide income. Renovation invoices carrying your tax number reduce the gain, so keep them from the first day of ownership.

How much tax does a retiree pay in Portugal

A foreign pension that was taxed at 10% under the non-habitual resident regime now goes into the ordinary scale of up to 48% for a new resident. For retirees this is the biggest change of recent years, and IFICI does nothing to soften it: pensions are expressly excluded from the regime.

How the tax is worked out. Pensions are category H (pension income) on the income tax return. The same specific deduction as for salaries, $5,200 (€4,587.09) a year, comes off first, and the rest is taxed on the 12.5-48% scale together with any other income. A pension paid from abroad is reported on annex J, the annex to the annual return for foreign income.

Worked example: a foreign pension of $27,000 (€24,000) a year, no other income. In euros: taxable base 24,000 - 4,587.09 = 19,412.91; tax on the 2026 scale 19,412.91 × 24.1% - 1,476.45 = about 3,202. That is about $3,600, or 13.3% of the pension. Under Greece's regime for foreign pensions the same amount would cost $1,900 (€1,680) at 7%.

Which country taxes the pension. The double tax treaty decides. A private pension is usually taxed in the country of residence, that is Portugal, while a pension for government service is as a rule taxed by the country that pays it. If tax was withheld abroad, Portugal credits it up to its own tax on the same pension.

Those who kept the non-habitual resident regime. Retirees registered under the regime from 1 April 2020 pay 10% on a foreign pension until the end of their ten years. For those registered earlier, a foreign pension is often fully exempt if the treaty conditions are met. No new statuses of this kind will be granted.

American citizens remain liable to American tax on worldwide income wherever they live. The Portugal-US tax treaty, in force since 1995, and the United States foreign tax credit usually prevent the same income being taxed twice in full, but they do not remove the duty to file in the United States.

A Portuguese pension paid to a non-resident is taxed at 25% after the specific deduction. If there is no other Portuguese income, a return is usually not needed: the tax is withheld at payment.

How are investments and crypto taxed in Portugal

Crypto held for more than a year is not taxed at all in Portugal, while dividends and share gains are taxed at a flat 28%. For a long-term investor this is one of the few genuinely generous rules in the Portuguese code.

Securities. The capital markets law, Law No. 31/2024 of 28 June 2024, introduced a partial exclusion for gains on listed securities and units in open-ended funds: 10% of the gain is exempt after two to five years of holding, 20% after five to eight years and 30% after eight years. That works out at effective rates of 25.2%, 22.4% and 19.6% instead of 28%. In practice the return form only lets you claim the relief on trades through Portuguese intermediaries; for an account with a foreign broker it is disputed. Gains on unlisted shares in small companies are taxed on half.

Short-term trades. If securities were held for less than 365 days and your taxable income including the gain reaches $97,000 (€86,634), the gain must be added to the progressive scale. For an active trader with a high income that means up to 48% instead of 28%.

Dividends and interest. You can opt for the scale instead of 28% when it is cheaper; dividends from European Union companies then count at half. Income from blacklisted jurisdictions is taxed at 35%.

Crypto. Since 2023, gains on crypto assets held for less than 365 days are taxed at 28%. Held for a year or longer, the gain is exempt, provided it is not a professional activity and does not involve blacklisted jurisdictions. Mining and regular trading as a business fall into category B and the scale of up to 48%.

Foreign brokers. A foreign broker withholds no Portuguese tax, so a resident reports the income personally in annex J, the foreign income annex, of the annual return.

What are the property taxes in Portugal

Since 25 May 2026 a non-resident buying a home in Portugal pays property transfer tax at a flat 7.5% from the first euro. On a $370,000 (€330,000) flat that is $28,000 (€24,750). A resident buying the same flat as their permanent home pays $14,200 (€12,642). Both also pay $3,000 (€2,640) in stamp duty, while a buyer aged 35 or under purchasing a first permanent home pays neither property transfer tax nor stamp duty. The measure was introduced by Decree-Law No. 97/2026 of 20 May 2026.

What matters is tax residence, not nationality. The 7.5% rate does not apply if the buyer has been a Portuguese tax resident before. The difference from the standard property transfer tax is refunded on application to the tax authority if you become resident within two years of the purchase, or let the home at a moderate rent of up to $2,600 (€2,300) a month within six months and keep it let for at least 36 months in the first five years. The tax authority does not recalculate the tax on its own: without an application the overpayment stays with the state.

Rent. Residential rent is taxed at 25% and non-residential at 28%. The 2026 housing package (the same Decree-Law No. 97/2026) cut the rate to 10% for leases at moderate rents of up to $2,600 (€2,300) a month, or 2.5 times the minimum wage. The rate runs from 1 January 2026 to the end of 2029. Value added tax on building homes for owner occupation or rental, priced up to $740,000 (€660,982) or let for up to $2,600 (€2,300), fell from 23% to 6%.

Selling. A resident is taxed on the scale on 50% of the gain. The gain on selling your permanent home is exempt if the money goes into a new permanent home in Portugal or the European Union within 24 months before or 36 months after the sale. Property bought before 1 January 1989 is fully exempt. For property selection, see investment property in Portugal.

What taxes does a company pay in Portugal

Portugal's corporate tax rate is falling on a schedule written into law: 19% in 2026, 18% in 2027 and 17% in 2028 (Law No. 64/2025 of 7 November 2025). Small and medium-sized businesses pay 15% on the first $56,000 (€50,000) of profit.

The headline corporate tax rate is only the start: surcharges come on top, and some expenses are taxed separately.

Autonomous taxation. It is a separate tax on expenses, not profit. Undocumented expenses are taxed at 50%, company cars on a scale that depends on price and engine type, and in a loss-making year the rates are, as a rule, 10 points higher. A loss-making Portuguese company can still owe tax.

Example calculation: what reaches the owner. A Portuguese private limited company with 80,000 euros of profit, about $90,000, pays 15% on the first 50,000 and 19% on the rest, or 13,200, plus a municipal surcharge of up to 1.5%, about 1,200. That is 14,400, or 18%. Paying out the remaining 65,600 as dividends triggers 28%, or 18,368. The owner receives 47,232 euros, about $53,000, a total take of about 41%.

Accountant and audit. Every Portuguese company must work with a certified accountant who signs the accounts. A public limited company always needs a statutory auditor; a private limited company only if it exceeds two of three thresholds for two years running: a balance sheet of $1.7 million (€1.5 million), turnover of $3.4 million (€3 million), 50 employees.

Company forms and set-up are on the company registration page, and bookkeeping support on audit and reporting.

What is the VAT rate in Portugal, and when can you work without it

Standard value added tax in Portugal is 23%, two points above Spain. In the Azores the same purchase is taxed at 16%: value added tax rates differ by region, and people forget this when invoicing from the islands.

Working without value added tax. You become liable for value added tax when you open an activity, but with turnover of up to $17,000 (€15,000) in the previous year you can trade without it under article 53 of the value added tax code. The price is no right to recover input tax. If turnover passes $21,000 (€18,750) during the year, the exemption ends at once and the invoice that crosses the line already carries value added tax.

Filing. Businesses with turnover of $730,000 (€650,000) or more file monthly, the rest quarterly. Services to private customers in other European Union countries go through the One Stop Shop, a single window for other European Union countries' value added tax. Invoices are issued in certified software with a unique document number and a QR code.

What other taxes are there in Portugal: road tax, tourist tax, inheritance

Portugal has no separate inheritance tax, but Lisbon's tourist tax is $5 (€4) per guest a night, up to $32 (€28) a stay. Beyond the big taxes, people who move usually run into four more payments.

Road tax. The single circulation tax is paid every year by the owner of a car with Portuguese plates, in the month the car was registered. The amount depends on engine size, CO2 emissions and year of registration, and electric cars are exempt. Bringing a car into the country triggers a one-off vehicle tax, though there is an exemption for people moving their permanent home, with conditions on how long you have owned the car.

Tourist tax. It is a municipal charge per night in a hotel or short-term rental. Lisbon charges $5 (€4) and Porto $4 (€3) per guest aged 13 and over per night, for no more than 7 consecutive nights. The host collects it, so the owner of a flat let as a licensed short-term rental has to pass it on to the municipality.

Inheritance and gifts. Instead of an inheritance tax there is stamp duty: 10% of the value of an inheritance or gift. Spouses, civil partners, children, grandchildren, parents and grandparents are exempt from the 10%. They inherit free of the charge, but when real estate is given to them as a gift they still pay 0.8% of its value.

Wealth tax. There is none. The closest thing is the annual surcharge on residential property worth more than $680,000 (€600,000), covered in the property section above.

Where are taxes lower: Portugal, Spain, Italy, Greece or Cyprus

Portugal beats its European Union neighbours on one count: its corporate tax is lower than in Spain, Italy and Greece. On salaries and on regimes for new residents it trails almost all of them, and even Spain's regime for incoming workers is easier for an ordinary employee to reach than Portugal's IFICI.

A non-domiciled resident in Cyprus is one whose domicile, the legal permanent home, is outside Cyprus; the benefit lasts for up to 17 years of living on the island.

The practical conclusion. A retiree with a foreign pension does better in Greece: 7% against a scale of up to 48%. A business owner does better in Cyprus, with 15% corporate tax and no tax on dividends for the non-domiciled. A highly paid employee is more likely to do better in Spain. Portugal wins if you qualify for IFICI, are 35 or younger, or live on long-term investment income.

A fuller comparison is in our review of taxes in Europe in 2026, and rates for every country are in our guide to taxes worldwide.

Double taxation and Portugal's tax treaties

Portugal has around 80 tax treaties, and the one with Russia works only in part. By decree No. 585 of 8 August 2023, Russia unilaterally suspended its key articles, including those on reduced rates for dividends, interest and royalties. On the Portuguese side the treaty remains in force.

In practice there are no longer reduced withholding rates in Russia; Russian domestic rates apply. Portugal credits foreign tax only up to the Portuguese tax on the same income, and any excess is not refunded. Under IFICI foreign income is exempt, so no credit is needed.

Former Soviet states. Among them Portugal has treaties with Ukraine, Moldova, Georgia, Estonia, Latvia and Lithuania. There are no treaties in force with Kazakhstan, Kyrgyzstan, Uzbekistan, Armenia, Azerbaijan or Belarus. That means full domestic withholding on both sides and only a limited unilateral credit in Portugal.

The credit requires a certificate of tax paid from the foreign authority, an apostille and a translation, so gather them in advance.

When to file and pay taxes in Portugal

The personal income tax return for 2026 is filed between 1 April and 30 June 2027, and any balance is due by 31 August. Paper returns have all but disappeared: everything goes through the tax portal.

Penalties. Filing late brings a fine, and it is much lower if you file on your own before an audit starts. Notices arrive in your tax portal account and count as received even if you never open them: the clock for a reply keeps running.

What are the pitfalls, and who is Portugal not for

The most expensive mistake when moving to Portugal is calculating tax from articles written while the non-habitual resident regime was open. The regime is closed, and much of the advice online was written for it.

Portugal is a poor fit for:

• Retirees with a foreign pension. IFICI does not cover pensions, which are taxed on the scale of up to 48%. Greece offers 7% on foreign pensions.
• Highly paid employees who do not qualify for IFICI. 48% above $97,000 (€86,634), the solidarity surcharge and uncapped contributions.
• Non-residents buying homes as an investment. 7.5% property transfer tax from the first euro, and an annual surcharge on a portfolio above $680,000 (€600,000).
• Small business owners who live on dividends. A total take of about 41% of profit.
• Active traders. Short-term gains are taxed at 28%, and on the scale at high incomes.

Portugal works for specialists who qualify for IFICI, people aged 35 or under with the youth income tax regime and the youth exemption from property transfer tax, long-term investors, and companies that value a falling corporate rate and access to the European Union market.

Traps that cost money: residence from the day you sign a long lease, not from day 183; missing the 15 January IFICI deadline; applying for IFICI without checking the youth income tax regime first, which closes the youth relief for good; a return without annex J while holding a foreign brokerage account; buying a home before becoming resident without budgeting for 7.5% property transfer tax.

How we help with taxes in Portugal

We model the burden for your scenario, check whether IFICI is realistic and compare Portugal with Spain, Cyprus and Greece. Then we help with residence, a personal bank account in Portugal, a company and reporting. For the full country overview, see Portugal.

What is important to know about taxes in Portugal

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