HomePage Contact Us About Us Advertise with us
Custom Search

Portugal  Income Taxes and Tax Laws













Last partial update, June 2016.

  • Portugal's tax rates for individuals is progressive.
    The 2016 tax rate is 14.5% - 48% There is an additional 3.5% surtax for income exceeding the minimum salary with additional 2.5% surtax for income between EUR 80,000 EUR 250,000 and 5% for income exceeding EUR 250,000.
  • Exemptions are granted to taxpayers with specific types of income.
  • The 2016 rate of tax for a corporation in Portugal is 21% with the addition of 3% surtax for income exceeding EUR 1.5 million up to EUR 7.5 million, 5% for income exceeding EUR 7.5 million up to EUR 35 million and 7% for income exceeding this ceiling with a local tax of up to 1.5%, maximum of 29.5%. in total.
  • Small companies pay 17% tax on the first EUR 15,000 income.
Portugal Income Tax for an Individual
  • An individual in Portugal is liable for tax on his income as an employee and on income as a self-employed person. In the case of an individual who answers the test of a "permanent resident" of Portugal, tax will be calculated on his income earned in Portugal and overseas.
    A foreign resident who is employed in Portugal pays tax only on his income in Portugal.
  • To be considered a Portuguese resident, the requirements must be met of residency in Portugal of at least 183 days in any calendar year, and occasionally also if residency is less than 183 days. If the individual has a home in Portugal that is his main residence, he will be considered a Portuguese resident.
  • An employer is obligated to deduct, immediately, each month, the amount of tax and national insurance due from a salaried worker.
  • Certain payments are deducted from taxable income as detailed below.


Portugal Individual Income Tax Rates 2016
Tax % Tax Base (Euro)
14.5% up to 7,000
28.5% 7,001-20,000
37% 20,001-40,000
45% 40,001-80,000
48% 80,001 and over


There is also a 3.5% surcharge for income exceeding the minimum wage and a solidarity tax of 2.5%/5% for income exceeding EUR 80,000/EUR 250,000.

Corporate Tax in Portugal


Portugal Corporate Tax
  • In Portugal the standard corporate tax in 2016 is 21% with an additional surtax of 3%-5% for income exceeding EUR 1.5 million and of up to 1.5% municipal tax making a total of 29.5%.
  • Companies in the free trade zone of Azores are eligible for a reduced tax rate of 17.5%.




Portugal Capital Gains

  • A company capital gain in Portugal is usually added to regular income.
  • For companies, under certain conditions, When the proceeds of the sale of shares and fixed assets which were held for more than 1 year. Only 50% of the gain is taxable if the proceeds are reinvested. Under certain conditions.
  • There is a participation exemption for dividend income, subject to terms.
  • On the sale of individual's real estate that was used as the vendor's residence, If the proceeds are invested in the purchase of alternative real estate for a residence in Portugal or EU/EEA country within a short period as defined in law, the capital gain is exempt from tax.
  • For individuals, a capital gain on the sale of shares is taxed at 28%.
    The tax rate is 14% for sale of shares of micro and small non listed companies.


Portugal Reporting Dates and Payment

The tax year in Portugal is the year ending on December 31.
Advance payments of tax are made as specified below.
  • 3 advance payments based on the tax paid in the previous year. The advances are paid in July, September and December.
  • A fourth advance payment of 1% of turnover must be paid by the date of filing the report. There are minimum and maximum amounts for the advance payment.
  • Individuals and companies are obligated to file financial statements by May 31 for companies, and by April 30 for individuals.


Portugal Deduction of Tax at Source

Taxation of Employee
An employer is obligated to deduct tax at source from an employee and to make additional contributions to social security.


Portugal Social Security
  • An employee: the employer's contribution is 23.75% of the salary.
              The employee's contribution is 11% of the salary.
  • The insurance covers pension, unemployment and care insurance.


Other deductions in Portugal

Tax must be deducted at source from the following payments to non-residents on the basis of the following:
  • Dividend - standard deduction of 25%.
  • Interest - the standard rate of tax deducted at source - 25%.
  • Royalties - the standard rate of tax deducted at source - 25%.
  • Services - the tax deducted at source is 25%.
Comment:
Tax deducted at source in respect of foreign residents is subject to the Double Taxation Prevention Treaty.







Austria Income Taxes and Tax Laws | Brazil Income Taxes and Tax Laws | Bulgaria Income Taxes and Tax Laws | BVI Income Taxes and Tax Laws | Canada Income Taxes and Tax Laws | China Income Taxes and Tax Laws | Croatia Income Taxes and Tax Laws | Cyprus Income Taxes and Tax Laws | Czech R. Income Taxes and Tax Laws | Estonia Income Taxes and Tax Laws | Finland Income Taxes and Tax Laws | France Income Taxes and Tax Laws | Germany Income Taxes and Tax Laws | Greece Income Taxes and Tax Laws | Hong Kong Income Taxes and Tax Laws | Hungary Income Taxes and Tax Laws | India Income Taxes and Tax Laws | Iran Income Taxes and Tax Laws | Ireland Income Taxes and Tax Laws | Israel Income Taxes and Tax Laws | Italy Income Taxes and Tax Laws | Japan Income Taxes and Tax Laws | Latvia Income Taxes and Tax Laws | Lithuania Income Taxes and Tax Laws | Malta Income Taxes and Tax Laws | Mexico Income Taxes and Tax Laws | Montenegro Income Taxes and Tax Laws | Netherlands Income Taxes and Tax Laws | Poland Income Taxes and Tax Laws | Portugal Income Taxes and Tax Laws | Romania Income Taxes and Tax Laws | Russia Income Taxes and Tax Laws | Serbia Income Taxes and Tax Laws | Slovakia Income Taxes and Tax Laws | Slovenia Income Taxes and Tax Laws | Spain Income Taxes and Tax Laws | Singapore Income Taxes and Tax Laws | Tunisia Income Taxes and Tax Laws | Turkey Income Taxes and Tax Laws | U.K. Income Taxes and Tax Laws | Ukraine Income Taxes and Tax Laws | U.S.A. Income Taxes and Tax Laws



Go Back

© All copyrights reserved

Portugal Homepage | Security Policy | Terms of Service