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If you’re interested in staying updated with capital gains tax in Portugal, then you’re in the right place.

Portugal has updated its capital gains tax structure. Both residents and non-residents will now be taxed at the same progressive rate.

In this article, we’ll be breaking down Portugal’s updated capital gains tax structure and explaining what it means.

What is capital gains tax?

Capital gains tax is a type of tax imposed on the profit received from the sale or disposal of an asset. This asset can include stocks, real estate, mutual funds, bonds, and other investments. The tax is imposed on the capital gain. Which is the difference between the original cost of the asset and the selling price.

Capital gains tax is a significant source of revenue for governments around the world. In many cases, it can be one of the highest taxes paid by investors and business owners. Therefore, individuals must understand how capital gains tax works and how it can impact their investments and business decisions.

Furthermore, many people may not be aware of the various exemptions and deductions available under capital gains tax laws. This lack of knowledge can result in individuals paying more in taxes than they need to. Being informed about the latest changes in capital gains tax regulations is essential for making sound financial decisions.

 

Changes to the capital gains tax in Portugal

These changes distinguish between two different scenarios: pre-December 31, 2022 and post-January 1, 2023.

Under the present scenario, only 50% of the net real estate capital gains value will be considered by the tax authorities. And taxed at a special rate of 28%. This is a significant change as previously, residents were only taxed at 50% of the capital gains, while non-residents were taxed at the full amount.

These capital gains will now be added to a non-resident’s other income at 50% of the value and are subject to the progressive tax scale. In conclusion, this means that both residents and non-residents will now be taxed at the same rate based on their income level.

It’s important to note that this change applies to capital gains from the sale of real estate, but not from the sale of other assets such as stocks or bonds.

 

How RHJ Accountants can help

When it comes to selling an asset, share, or any other form of income, it’s essential to understand the implications of capital gains tax. With the updated tax structure in Portugal, it’s even more important to seek expert advice.

At RHJ Accountants, we have a team of specialists with in-depth knowledge of capital gains tax in Portugal. We can help by creating an evaluative report that outlines the expected tax payment so you can plan accordingly.

Moreover, our team offers a FREE initial consultation to discuss your situation and explain the services we can provide. Get in touch with us today and let us help you.

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💬 PSA: between April & June our Portuguese team have limited meeting availability due to the Tax Return Submission Period 🇵🇹