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- All forms of tax relief relate to the income of an individual in Portugal.
- Tax relief is granted in the form of a tax credit, that is, a reduction of the tax itself, and sometimes the relief is in the form of a deduction, that is a reduction, on the amount of taxable income.
- The following amounts are subject to the definitions and limits in Portuguese law.
| Personal Tax Relief |
Comments |
Personal tax credits
|
Depending on the family status of the individual and the number of dependent family members. |
Disability Credit
|
EUR 1,800 per year . |
| Interest on the purchase of an apartment. |
Up to 30% for a permanent place of residence. |
| Educational costs |
Up to 30% of the cost. |
| Medical expenses |
30% of the cost subject to certain conditions. |
| Insurance & Pension |
Up to 25%. |
| Alimony Payment |
If paid by court ruling. |
| Donations |
Tax credit of 25%, up to a limit. |
Portugal Business Deductions
In addition to the reductions/credits specified above, reductions and business expenses may be sought as follows:
- Offset of losses - A loss may be offset up to 6 years forward. In certain cases of changing the company's ownership or change of the nature of activity, the carry forward is not allowed.
- Consolidated statements - The possibility exists in Portugal to offset a loss in one company in a group against the profit of another company in the group.
- Financing costs - Interest on suppliers credit is allowable for tax, interest on loans obtained from shareholders are recognized to the limit of interest in the market.
- Doubtful debts - Provisions are made for overdue debts at rates of 25%-100%, depending on the time length of the amounts overdue.
Portugal Depreciation of Fixed Assets
- The depreciated balance or the straight-line method are the accepted method of depreciation in Portugal.
- A table of the rates of depreciation according to the straight line method is as below. :
| Class of Asset |
Annual Depreciation (%) |
| Office buildings |
2 |
| Industrial buildings |
5 |
| Machinery & equipment & office equipment |
12.5% - 25% |
| Computers and Software |
33.3% |
| R&D Expenses |
100% |
| Cars (subject to a limit) |
4-25 |
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