Every year, the tax season in Portugal begins on 1 April and ends on 30 June – also known as the Imposto sobre o Rendimento das Pessoas Singulares (IRS) season.
While the tax period itself is pretty simple, running from January to December, preparing and filing a submission on the Portal das Finanças isn’t too straightforward. That’s where it helps to enlist the services of an accounting firm but not just any accounting firm, one that pays attention to the double taxation treaty rules (hello RHJ!) – since the majority of people that need support are Expats in Portugal.
If you’re new to Portugal, what is IRS?
As briefly mentioned in the intro paragraph, the IRS stands for Imposto sobre o Rendimento das Pessoas Singulares. Whether you’re a Portuguese tax resident, earning income from Portugal or have recently sold a property/assets/land in Portugal there’s typically a requirement to file a tax return between 1 April to 30 June; in respect of your earnings from the previous tax year.
For example, this year (2026) everyone should be declaring their earnings from January to December 2025, or perhaps you’ll need to declare a partial tax year if your tax address was only changed to Portugal in May 2025 – so then you’d declare income from May to December 2025.
Who has to pay attention to this?
People who receive income from employment, business, professional work (like self-employment), property, assets and/or pensions in Portugal should declare their income, by submission of an IRS.
Although, in the year to which a tax submission relates to, individuals who have only received the following are exempt from submitting a tax return:
- income taxed by withholding taxes;
- employment income or pensions with a total value up to 8,500 EUR;
- subsidies or grants under the Common Agricultural Policy with an annual value of 1921,72 EUR
- isolated act (ato isolado) with an annual value of 1921,72 EUR
It’s important to keep in mind that exemptions from filing an IRS return does not include citizens who wish to declare a joint return, who receive temporary or lifelong annuities which are not for paying pensions, and who receive maintenance allowances in excess of 4,104 EUR.
The latest changes & tax rates
In relation to the 2025 tax period there have been no changes, since the government moved their focus across to the 2026 period. However, individuals able to take advantage of the NHR, IFICI or IRS Jovem should benefit from lower taxation rates; unless it’s deemed that the progressive rates are better overall. The below table highlights the income tax rates for the 2025 period:
| Taxable income | Rate (%) | Deductible amount (€) |
|---|---|---|
| Up to 8,059 | 12.5 | – |
| + 8,059 up to 12,160 | 16 | 282.07 |
| + 12,160 up to 17,233 | 21.5 | 950.91 |
| + 17,233 up to 22,306 | 24.4 | 1,450.67 |
| + 22,306 up to 28,400 | 31.4 | 3,011.98 |
| + 28,400 up to 41,629 | 34.9 | 4,006.10 |
| + 41,629 up to 44,987 | 43.1 | 7,419.54 |
| + 44,987 up to 83,696 | 44.6 | 8,094.51 |
| + 83,696 | 48 | 10,939.90 |
Filing your IRS Portugal
Personal information
To submit a tax return in Portugal, it’s important to have access to the Portal das Finanças system which is used to manage all fiscal obligations as an individual. Whomever helped to obtain your NIF (tax number) for Portugal should have received a password for this portal at the same time; but there are some occasions where individuals aren’t given total access.
No matter, it’s possible to recover the password should you not have it – so there’s always a way to obtain the necessary details!
Supporting documents
For our team to determine what should be declared on your tax return, we’ll need access to several supporting documents – unless you’re already a monthly client of RHJ! This includes things in relation to:
- Employment income (payslips, annual income declaration, foreign income, work agreement)
- Self-employment income (gross income, expenses, social security contributions, type of activity, service agreement)
- Pensions (annual declaration, other supporting documents)
- Rental (income information from portal, expenses)
- Foreign rental (gross income, expenses, tax paid on source)
- Company (dividend vouchers, payslips, other documents)
- Investments (investment statements, bank statements)
- Capital gains (broker’s statements, own report with assets bought/sold)
- Capital gains: sale of property (deed of purchase/sale, expenses, global income, tax paid in country of source)
Submission
To get an idea about the type of work our team conduct, to help submit your tax return in Portugal, we’ll follow a few steps:
- Accept our proposal, and sign the T&Cs;
- Send us all your documents;
- Await summary of your submission;
- Review the summary and tell the team if anything needs changing;
- Confirm that the tax return can be submitted, before or after edits;
- We’ll submit the tax return on your behalf;
- Await the Tax Authority to approve your tax returns;
- Liquidation note is issued to highlight the tax due;
- Payment document shared for tax payments to be made, if anything is due!
Don’t worry if it all appears a little daunting (especially if you earn several different income streams), that’s what we’re here for.
Key deductions
You may be eligible for several deductions that can significantly reduce your tax liability. Here are the main categories to consider:
Personal and family deductions
- €600 per dependent, with an additional €126 for dependents under 3 years old.
- €525 for ascendants living in the same household with income below the minimum pension.
Health expenses
- Deduction of 15% of eligible health expenses, capped at €1,000. This includes VAT-exempt goods and services, as well as health insurance premiums.
Education and training expenses
- 30% of education and training expenses, capped at €800. This limit increases to €1,000 for students attending institutions in inland regions.
Real estate expenses
- Deduction of 15% of rent paid for permanent residence, capped at €700. This limit can increase to €1,100 for lower-income taxpayers.
Retirement savings plans
- Tax credit of 20% of contributions to retirement savings plans, with limits based on age
- €400 for individuals over 50 years old.
- €700 for individuals aged 35–50.
- €800 for individuals under 35.
Donations
- Tax credit of 25% of donations to eligible entities, with no limit for donations to public institutions.
General family expenses
- Deduction of 35% of general household expenses, capped at €500 per taxpayer.
VAT deductions
- Deduction of 15% of VAT incurred on specific services, such as vehicle repairs, accommodation, and food services, capped at €250.
These deductions can help reduce your overall tax burden, but the exact amounts and eligibility depend on your specific circumstances. During the preparation stage of your tax return filing, our team will take all eligible deductions into consideration.
IRS for non-residents
If you’re classified as non-resident of Portugal, which you can confirm on the Portal das Finanças page, there’s usually no requirement to file a tax return. Unless, you’re earning Portuguese sourced income, then a tax return is required.
Foreign income & DTT
The Portuguese Tax Authority require that your worldwide income is declared, no matter if it has already been taxed in the country of source. That’s where Double Taxation Treaties come into place, so long as the foreign income country has a DTT with Portugal.
Each country has its own article which details how income is taxed in Portugal, after paying income in the country of source. Under many bilateral tax agreements, the amount of tax you paid in the country of source will be offset against the tax you owe in Portugal; as your country of residence. In other cases, the income earned from abroad might be taxable only in that country and you just simply need to declare it in Portugal.
Although there may be a risk that your income is tax twice if both countries have the right to, which is why it’s important to work with a firm that understands the DTT agreements – we do!
Filing as a family
As an individual you’ll declare everything in relation to your worldwide income by 30 June, although sometimes an extended deadline can be given as long as you meet certain conditions. Besides individual submissions it’s also possible to file a joint tax return and include dependents too.
Married couples can opt to file a joint tax return disclosing the total income earned by both. However, in some cases it’s more tax beneficial to keep the tax filings separate – it all depends on your total income and whether either individual benefits from a tax scheme (like the NHR or IFICI).
Whether joint or individual tax returns, the respective dependents should be declared on the tax return. In most instances this also helps to provide deductions on your tax return, but of course that final decision rests with the Tax Authority.
How RHJ Accountants can help
We’re always happy to assist individuals, couples, families, Expats, non-residents, and whomever else to submit their tax return in Portugal.
This year we can guarantee that your tax return will be submitted by 30 June deadline, as long as we receive all information by 7 June. Of course the sooner we receive your information the better, so our team have plenty of preparation time and then you also have time to review the summary of figures – before the final submission is made.
Whether you simply need a tax return, want to make your personal (or corporate) situation more tax efficient, require previous tax return amendments or just simply want to find out how we can support tax residents in Portugal – feel free to get in touch.
