Portugal

Personal and business taxation in Portugal

Documentary position as at 26 September 2026. The reference points concern mainland Portugal unless otherwise stated; the consolidated codes consulted show updates up to August 2026.

1. Identifying the territory, the taxpayer and the year

1. Personal income tax is IRS (Código do IRS, CIRS); corporate income tax is IRC (Código do IRC, CIRC). S01S14

2. The legislative assemblies of the Azores and Madeira may, under the regional finance law, reduce the national rates of IRS, IRC and IVA by up to 30%. S23S22

3. IMI and IMT are municipal taxes; the IMI rate for urban property is set by each municipality within a statutory range, and the municipal derrama on company profits is voted by the municipality within a limit of 1.5%. S25S20

4. The IRS scale derives from Law n.º 73-A/2025; the reduction in the general IRC rate is tied to the date on which the tax period begins, 2026, 2027 or 2028. S03S15

2. Individual residence, arrival and departure

5. Under Article 16 of the CIRS, a person is resident for the year if he or she has stayed in Portugal for more than 183 days, consecutive or not, in any twelve-month period beginning or ending in that year, or, having stayed for less, has on any day of that period a dwelling there in circumstances suggesting a present intention to keep and occupy it as a habitual residence. S02S01

6. Any day, whole or partial, that includes an overnight stay in Portugal counts as a day of presence. Residence is assessed separately for each taxable person in the household. S02

7. Meeting one of these criteria, the person becomes resident from the first day of his or her stay, or from the first day of the year if he or she was resident on any day of the preceding year. Resident status is lost from the last day of stay, subject to n.os 14 and 16. S02

8. The taxpayer remains resident for the whole year of departure if he or she stayed there for more than 183 days and receives, after the last day of stay, income that would have been taxable had residence been maintained, unless he or she proves similar taxation in a State of the Union or the EEA, or in a third State at a rate of at least 60% of the Portuguese rate. The taxpayer also remains resident if he or she becomes resident again in the year following departure. S02

9. A Portuguese national who transfers his or her residence to a territory on the list of clearly more favourable tax regimes remains deemed resident in the year of transfer and the following four years, unless legitimate reasons are proved, and until he or she becomes resident in a territory not on the list. S02

10. Departure does not trigger general taxation of unrealised gains: Article 10-A covers gains deferred on an exchange of shares, a merger, a demerger or a contribution under Article 38: they become taxable in the year of departure. On departure to a cooperating State of the Union or the EEA, the taxpayer may pay immediately, in the year following the extinction or transfer of each holding, or in five annual instalments, both of these options bearing interest and possibly requiring a guarantee. S09S01

11. For crypto-assets that are not securities, n.º 25 of Article 10, formerly n.º 22 and renumbered by Decree-Law n.º 97/2026, treats the loss of resident status as a disposal for consideration for the purposes of alínea k) of n.º 1. However, n.º 22 excludes gains and losses on crypto-assets held for at least 365 days; the deemed disposal therefore has effect only for assets held for a shorter period, n.º 24 disapplying that exclusion where the taxpayer or the payer is resident neither in the Union or the EEA nor in a State bound by a treaty or an agreement on the exchange of information, subject to its cross-reference to n.os 19 and 20, which has not been updated after the renumbering. S01

12. Dual French-Portuguese residence is resolved under Article 4 of the treaty of 14 January 1971, as amended: permanent home, centre of vital interests, habitual abode, nationality, then agreement between the competent authorities. S27

3. IRS: tax scale, categories and income taxed at special rates

13. Under Article 15 of the CIRS, a resident is taxed on worldwide income and a non-resident only on income obtained in Portugal. Spouses or de facto partners (unidos de facto) are taxed separately, unless they opt for joint taxation of the household; the family situation taken into account is that on the last day of the year. S01

14. Income taxable under the scale results from the aggregation (englobamento) of the categories, after deductions. Excluded from it are the income of non-residents, apart from certain capital gains, and income subject to the rates in Articles 71 and 72, subject to the option for englobamento, which then applies to the whole category, or to mandatory englobamento. S01

15. The scale in Article 68, as worded by Law n.º 73-A/2025, has nine brackets. The average rate of the last bracket fully exceeded applies to the corresponding portion, and the normal rate of the next bracket applies to the excess. S03S01

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16. The solidarity surcharge in Article 68-A is added: 2.5% on the portion from 80,000 to 250,000 euros and 5% above that. Under joint taxation, the calculation is made on half of the taxable income and the result is doubled. S01

17. Investment income obtained in Portugal and paid by an entity having its registered office, place of effective management or a permanent establishment there that keeps organised accounts is subject to a final withholding tax of 28%, whether the recipient is resident or not. A resident acting outside a business or professional activity may opt for englobamento, the withholding then becoming a payment on account. The rate is 35% in the cases in n.º 17 of Article 71, in particular accounts held on behalf of unidentified third parties and income connected with a jurisdiction on the list of clearly more favourable tax regimes. S06

18. Foreign investment income not subject to withholding in Portugal is taxed at 28%, or 35% if it is owed by a non-resident entity in a clearly more favourable tax regime. The positive balance of gains on securities and other transactions under Article 10, n.º 1, b) is also taxed at 28%, unless englobamento is opted for. S07

19. For listed securities and units in open-ended collective investment undertakings, 10%, 20% or 30% of the gain is excluded for a holding of more than two years, at least five years or at least eight years respectively. Englobamento becomes mandatory for gains on assets held for less than 365 days where taxable income, including that balance, reaches the top bracket of the scale. For shares in unlisted micro and small enterprises, only 50% of the positive balance is taken into account. S11S07

20. For individuals, the balance relating to real estate, intellectual property acquired from a third party and rights under real estate contracts is taken into account at only 50% of its amount, except for certain properties that have received significant non-repayable public aid and are sold within ten years. That balance is then aggregated and taxed under the scale. Excluded, subject to reinvestment conditions, are gains on the principal residence reinvested in another principal residence in Portugal or in the EU/EEA and, for disposals from 2026 to 2029, gains on residential property reinvested in Portuguese dwellings let at moderate rent for at least 36 months within five years (Article 10, n.os 5 to 9). S11S01S29

21. Residential rents are taxed at a separate flat rate of 25%, reduced by 10, 15 or 20 points for permanent-residence leases of at least five, ten or twenty years. These reductions do not apply to leases concluded since 1 January 2024 whose rent exceeds by 50% the general limits by property type and municipality, and are lost retroactively if the lease is terminated early for reasons attributable to the landlord. Other property income is taxed at 28%, unless englobamento is opted for. However, for income received from 1 January 2026 to 31 December 2029, the separate flat rate is 10%, unless a more favourable rate applies, for exclusively residential leases whose monthly rent does not exceed 2.5 times the 2026 monthly minimum wage, a limit that may be updated by portaria (EBF, Article 45-C; Decree-Law n.º 97/2026, Articles 2 and 18). S07S12S29

22. The tax credit under Article 81 is limited to the lower of the foreign tax and the portion of IRS attributable to that income and, where a treaty applies, to the tax permitted by that treaty. If there is insufficient tax liability, the remainder may be credited over the following five periods within the same limit; foreign tax exceeding that limit cannot be carried forward. Income exempt under a treaty with progression is aggregated to determine the rate applicable to other income. S08

4. End of the RNH, the IFICI regime and schemes for young people and former residents

23. The non-habitual resident (RNH) regime was abolished by Law n.º 82/2023 of 29 December 2023, which repealed n.os 8 to 12 of Article 16 of the CIRS and the related rules in Articles 22, 72, 81 and 99. Article 236 of that law preserves it for certain persons, until the end of the period laid down in former n.º 9 of Article 16, counted from the year of residence. S02S01

24. This preservation covers a taxpayer already registered as a non-habitual resident, for the remainder of his or her period; a person who met the residence conditions on 31 December 2023; and a person who became resident no later than 31 December 2024 and can show a statutory connecting factor, such as an employment contract concluded no later than 31 December 2023, a lease or a property reservation dated no later than 10 October 2023, or a visa or residence permit valid up to 31 December 2023. Their household is also covered. S02

25. A person arriving in Portugal in 2025 or 2026 can therefore no longer, in principle, apply for the RNH, unless he or she personally falls within a transitional category. S02S01

26. The regime that succeeds it is the tax incentive for scientific research and innovation (IFICI) in Article 58-A of the EBF. It covers a person who has become resident within the meaning of n.os 1 and 2 of Article 16 of the CIRS, who was not resident in the previous five years, and who carries on an activity from an exhaustive list. S13S12

27. These activities include, in particular, higher education and research, qualified jobs linked to contractual investment benefits, highly qualified professions in certain assisted companies or companies exporting at least 50% of their turnover, qualified jobs in entities recognised by AICEP or IAPMEI, eligible R&D, certified start-ups and regional activities defined by regional decree. S13

28. An eligible person may be taxed at 20% on net category A and B income derived from eligible activities, for ten consecutive years from the year of his or her registration as a resident, unless englobamento is opted for. Each year requires residence at some point in the year and income from an eligible activity; a new activity begun within six months ensures continuity. S13

29. For beneficiaries of Article 58-A, Article 81 applies the exemption to foreign income in categories A, B, E, F and G, which is aggregated to determine the rate applicable to other income, except income paid by non-resident entities in a clearly more favourable tax regime, which is taxed at 35% under Articles 71 and 72. S08S13

30. Registration is made with the competent body according to the activity, on the conditions laid down in a portaria; if late, it takes effect only from the year in which it is made, for the remaining period. The regime may be used only once and is closed to current or past beneficiaries of the RNH and to those who have opted for Article 12-A. S13

31. IRS Jovem under Article 12-B partially exempts, on election, category A and B income of a taxpayer aged 35 or under who is not a dependant, for ten years of category A or B income in respect of which the election is made, without exceeding the age limit. The exemption is 100% in the first year, 75% from the second to the fourth year, 50% from the fifth to the seventh year and 25% from the eighth to the tenth year, capped at 55 times the social support index (IAS). This income is aggregated to determine the rate. S04

32. IRS Jovem is not available to a person who benefits or has benefited from the RNH or the IFICI, to a person who has opted for Article 12-A, or to a person whose tax affairs are not in order. A transitional rule in Law n.º 45-A/2024 places each taxpayer on the scale of exemption rates according to the years of receipt of category A or B income already elapsed, not counting years in which he or she was a dependant. S04

33. The former residents regime in Article 12-A excludes 50% of employment and business or professional income for five years for a person who became resident up to 2026, who was not resident in the previous five years but was resident before that, and whose tax affairs are in order; it is closed to anyone who applied for the RNH. The cap, equal to the upper limit of the first bracket in Article 68-A, applies only to persons resident from 2024 onwards (Law n.º 82/2023, Article 236, n.º 6). S05

5. Non-residents and Portuguese-source income

34. Article 18 of the CIRS deems to be obtained in Portugal, in particular, salaries from an activity carried on there or paid by an entity established there, income of a permanent establishment, certain services paid for by a Portuguese entity, income and gains from Portuguese real estate, gains on shares in Portuguese companies and pensions paid by a Portuguese entity. S10

35. Portuguese-source salaries, business or professional income, even from isolated acts, and pensions of a non-resident are in principle subject to a final withholding tax of 25%. No withholding is made, on written declaration, up to the monthly minimum wage for employment or services income paid monthly by a single entity. Pensions qualify for the deduction in Article 53; other income is taxed on the gross amount. For income under Article 18, n.º 1, a) to d), f), m) and o) subject to withholding, a resident of a cooperating State of the Union or the EEA may obtain, on application within two years following the end of the year after the taxable event, a refund of the excess over the scale applied to his or her worldwide income (Article 71, n.os 11 to 13). S06S10

36. Portuguese-source dividends and interest paid to a non-resident individual are subject to the 28% final withholding tax under Article 71, or 35% in the cases covered by n.º 17 of that article. For a resident of France, Article 11 of the treaty limits Portuguese tax on dividends to 15% of the gross amount and Article 12 limits Portuguese tax on interest to 12%, the 10% rate in the same article applying only to certain bonds issued in France. A non-resident company without a permanent establishment is, for its part, subject to IRC at the standard rate of 25% (table in section 6). S06S27

37. Property income of a non-resident follows the rates in paragraph 21, as the text of Article 45-C of the EBF does not distinguish according to residence, or 28% for non-residential property income. Income of a non-resident attributable to a permanent establishment in Portugal is taxed at 25%. A resident of another State of the Union or the EEA with exchange of information may opt, for some of this income, for the rate that would result from the scale taking into account all of his or her worldwide income. S07S12

38. Gains on real estate realised by a non-resident are an exception to the principle of non-englobamento: they are aggregated and taxed under the scale, unless attributable to a permanent establishment, the rate being determined by reference to all of his or her income, including foreign income (Article 22, n.º 10). Article 43, n.º 2, which takes these gains into account at 50%, does not reserve that rule to residents in the version consulted. S01S11S06

6. Companies: residence, tax base and rates

39. Entities having their registered office or place of effective management in Portugal are resident for IRC purposes and are taxed on their worldwide income. Non-resident entities are taxed only on their Portuguese-source income, in particular that of a permanent establishment, income from Portuguese real estate and gains on shares in Portuguese companies. S14

40. Law n.º 64/2025 sets the general IRC rate at 17% for periods beginning on or after 1 January 2028, with 19% for those beginning in 2026 and 18% for those beginning in 2027. This timetable also applies to residents whose main activity is not commercial, industrial or agricultural. S15S14

41. SMEs and small mid caps within the meaning of Decree-Law n.º 372/2007 whose main activity is agricultural, commercial or industrial are taxed at 15% on the first 50,000 euros for periods beginning on or after 1 January 2026, subject to the de minimis rules; that rate is reduced to 12.5% for start-ups certified under Law n.º 21/2023. S15

42. The municipal derrama, voted by the municipality, may reach 1.5% of the taxable profit of residents whose main activity is commercial, industrial or agricultural and of non-residents with a permanent establishment; it is apportioned according to the payroll if the company is present in several municipalities with taxable income exceeding 50,000 euros. The state derrama (derrama estadual) applies, for the same taxpayers, to the portion of taxable profit exceeding 1.5 million euros; an entity without such a main activity is subject to neither. S20S16

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43. Dividends received by a resident company are excluded from profit if the holding amounts to 10% of the capital or voting rights, held without interruption for one year or until that period is completed, if the recipient is not subject to tax transparency and if the distributing entity, not established in a clearly more favourable tax regime, is subject to tax at a statutory rate of at least 60% of the general rate. This taxation condition is waived if the conditions in Article 66, n.º 7 are met. The exclusion does not apply to dividends deductible by the distributing entity, nor to those of non-taxable or exempt entities located outside the EU/EEA, unless they derive from income taxed at the level of lower-tier subsidiaries (n.º 10), nor in the case of a non-genuine arrangement (n.os 13 and 14). S17

44. Dividends paid by a Portuguese company to a company of the Union, the EEA or a treaty State providing for the exchange of information are exempt from withholding tax where the recipient is subject to a tax of the type covered by the Parent-Subsidiary Directive or, for a treaty State, to a statutory rate at least equal to 60% of the general rate, and has held at least 10% for one year. Proof must be provided before the dividends are made available. The exemption is disapplied in the case of a non-genuine arrangement (n.os 17 and 18); it is also disapplied, unless it is proved that the recipient is not part of such an arrangement, where the distributing company has not complied with its reporting obligations to the central register of beneficial owners or where a declared beneficial owner is resident in a clearly more favourable tax regime (n.º 19). S18

45. Interest and royalties paid to an associated company of another Member State may be exempt on the conditions of Directive 2003/49/EC as transposed in Article 14, in particular a direct holding of at least 25% held for two years, unless the company is majority-held by residents of third States without justification. S18

46. The transfer of a company's residence out of Portugal makes taxable the differences between the market value and the tax value of its assets. On a transfer to a State of the Union or the EEA bound by equivalent assistance in recovery, the tax may be paid immediately or in five annual instalments, with interest and, where there is a risk, a guarantee. S19

47. The Madeira free trade zone taxes, for entities licensed between 1 January 2015 and 31 December 2026, certain income at 5% until 31 December 2033, subject to one of the alternative employment conditions, with or without a minimum investment of 75,000 euros, and within annual caps on benefits. S12

7. IVA, autonomous regions and real estate transactions

48. The IVA rates on the mainland are 6% for goods and services in List I annexed to the code, 13% for those in List II and 23% for other transactions. The 6% rate also applies to imports and supplies of works of art provided for by special legislation. Decree-Law n.º 97/2026 added to the 6% rate construction contracts (empreitadas) for the building or renovation of dwellings sold as a principal residence or let at moderate prices or rents, for operations begun between 25 September 2025 and 31 December 2029; the tax must become chargeable on or after 1 January 2026; the rate applies from the quarter following the entry into force of the decree-law, namely 1 July 2026 according to the note in the consolidated code, or from 1 January 2026 on joint election, with reverse charge by certain acquirers, and the verba ceases on 31 December 2032. S22S21S29

49. The legislative assemblies of the Azores and Madeira may set reduced rates for transactions deemed to take place in the region and for imports cleared there, the reduction being up to 30% of the national rates. The regional rates in force have not been verified in the regional legislative decrees and must be confirmed before any invoicing. S22S23

50. The letting of immovable property is in principle exempt from IVA, subject to the exceptions provided for in the code, and transactions subject to IMT are also exempt. S21

51. The code provides for an exemption scheme for small businesses; the 2025 transitional provisions refer to a turnover threshold of 15,000 euros and to exit during the year if it is exceeded by more than 25%. As n.º 1 of Article 53 is not reproduced in the PDF consulted, that threshold must be checked in the current version. S21

8. Real estate: IMT, IMI and income

52. IMT applies to transfers for consideration of Portuguese real estate and to the acquisition of shares or interests where more than 50% of the company's assets consist of Portuguese real estate not used in an agricultural, industrial or commercial activity other than the purchase and resale of real estate, and a shareholder comes to hold at least 75% of the capital, or the shareholders are reduced to two spouses or de facto partners, except for the companies referred to in Article 4, f) of the regime of the central register of beneficial owners. S24

53. For the acquisition of urban property intended exclusively for own permanent residence, the IMT scale is progressive and includes an exempt bracket up to 106,346 euros; above 660,982 euros, a single rate of 6% applies to the entire value, then 7.5% above 1,150,853 euros. For other residential property, the first bracket is taxed at 1% and the single rate of 6% applies above 633,931 euros. Rustic property bears 5% and other urban property and acquisitions for consideration 6.5%. Since Decree-Law n.º 97/2026, the rate is always 7.5%, without exemption or reduction, for the acquisition by a non-resident of urban property used exclusively for residential purposes, unless the acquirer has previously been resident, becomes resident within two years or, within six months, allocates the property to residential letting at moderate rent for at least 36 months within five years; in the last two cases, the excess is cancelled on application made within six months (Article 17, n.os 10 to 12). That text has no specific effective date of its own. S24S29

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54. A separate category covers acquisitions of own permanent residence falling under n.os 2 to 5 of Article 9 of the CIMT, the conditions of which are not analysed here: the value is exempt up to 330,539 euros and then taxed according to the higher brackets. The 10% rate, without exemption or reduction, applies, under n.º 4 of Article 17, to an acquirer domiciled in a clearly more favourable tax regime or to an entity dominated or controlled by an entity domiciled there; n.º 7 of the same article disapplies it where the acquirer is an individual. S24

55. IMI is payable annually on the taxable property value (valor patrimonial tributário). The rate is 0.8% for rustic property and 0.3% to 0.45% for urban property, within the range that each municipality sets, possibly by parish. It is tripled for urban property that has been vacant for more than one year or is in ruins; in areas of urban pressure, Article 112-B replaces this with a rate multiplied by ten, increased by 20% per year up to a limit of twenty times the rate, a limit which the municipal assembly may raise by 50% or 100%. It is increased to 7.5% for owners other than individuals that are domiciled in a clearly more favourable tax regime or dominated or controlled by an entity domiciled there (Article 112, n.os 4 and 17). S25

56. The acquisition, for consideration or by gift, of a right of ownership in real estate also bears imposto do selo of 0.8% of the value (verba 1.1 of the Tabela Geral). S26

57. For a non-resident landlord, IMI, possibly AIMI, and IRS on the rents are cumulative; the capital gain falls under paragraph 38 and, for a resident of France, under Article 14 of the treaty. S25S07S27

9. Wealth: no general tax, and the AIMI

58. No general wealth tax appears; the additional IMI (adicional ao IMI, AIMI) is levied on the sum of the taxable property values of the Portuguese urban properties of which the taxpayer is owner, usufructuary or holder of a surface right on 1 January. S25

59. Excluded from the base are properties classified as "commercial, industrial or for services" and "other", dwellings under the rent support programme (Decree-Law n.º 68/2019, repealed with effect from 1 September 2026 by Decree-Law n.º 97/2026, which maintains its effects for contracts in progress and, by its Article 14 a), relates references to that programme to the simplified affordable rental regime, RSAA) and properties exempt from or not subject to IMI in the previous year. Individuals and undivided estates are entitled to a deduction of 600,000 euros, which is excluded for vacant or ruined properties subject to tripled IMI. The 1% and 1.5% brackets refer to the value under n.º 1 of Article 135-C, an interaction that remains to be verified. S25S29

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60. For properties held by a legal person and allocated to the personal use of shareholders, directors or their relatives, the rate is 0.7%, then 1% and 1.5% according to the same portions as for an individual. S25

61. Former verba 28 of the Tabela Geral of imposto do selo has been repealed since Law n.º 42/2016. S26S25

10. Inheritances and gifts: the imposto do selo

62. In the texts consulted, gratuitous transfers are subject to imposto do selo. Verba 1.2 of the Tabela Geral subjects the gratuitous acquisition of assets, including by adverse possession (usucapião), to a rate of 10%, which, for gifts of real estate, is in addition to verba 1.1. S26

63. Covered in particular are rights in real estate, registered assets, shareholdings and securities, monetary assets, businesses (going concerns), intellectual property, shareholder loans and crypto-assets. Not subject, in particular, are life insurance proceeds, social security pensions or allowances paid on death, certain retirement savings products and assets for personal or household use. S26

64. The spouse or de facto partner, descendants and ascendants are exempt under verba 1.2; in the case of a gift of real estate, verba 1.1 of 0.8% remains payable, as that verba does not cover transfers on death. Other beneficiaries who are individuals bear 10%; transfers to persons liable to IRC are not subject to verba 1.2. S26

65. The tax on gratuitous transfers is payable for assets situated in Portugal, in particular rights in assets situated there, assets registered in Portugal, receivables and holdings in Portuguese entities if the acquirer is domiciled there, monetary assets and crypto-assets deposited with Portuguese institutions and, where there is no such deposit, those transferred on the death of a deceased person domiciled in Portugal or, in other cases, to a beneficiary domiciled there. S26

66. French gift and inheritance taxes remain to be examined; no French-Portuguese inheritance tax treaty has been identified. S26S27

11. The France–Portugal treaty and international obligations

67. The French-Portuguese treaty of 14 January 1971, in force since 18 November 1972, was amended by the protocol of 25 August 2016, in force on 1 December 2017, and then by the OECD Multilateral Convention, in force on 1 January 2019 for France and 1 June 2020 for Portugal. S27

68. Income from immovable property is taxable in the State in which the property is situated. Gains on immovable property are likewise taxable there, as are gains on shares or similar rights which, at any time during the 365 days preceding the disposal, derive directly or indirectly more than 50% of their value from immovable property situated in the other State; the same applies to gains on shares or interests conferring the enjoyment of immovable property. Gains on movable property of a permanent establishment or a fixed base are taxable in the State in which they are situated. Gains on other property are taxable only in the State of residence of the alienator. S27

69. Private pensions paid in respect of past employment are taxable only in the State of residence, subject to Article 20. French administrative guidance infers from this that private pensions, including French social security pensions of a private nature, are not subject to French tax where the recipient is resident in Portugal. S27S28

70. Public salaries, other than pensions, paid by a State or its local authorities are in principle taxable in that State; they are taxable in the other State where the services are rendered there by a resident who is a national of that other State without also being a national of the first State. Public pensions are taxable only in the paying State, unless the recipient is resident in, and a national of, the other State. Independent professional income remains taxable in the State of residence, unless there is a fixed base in the other State. Private salaries are taxable in the State where the employment is exercised, unless the stay does not exceed 183 days in the tax year, the employer is not resident in that State and the remuneration is not borne by a permanent establishment or fixed base which the employer has there; the remuneration of directors, members of the supervisory board and managing partners in respect of their office remains subject to the domestic law of each State. S27

71. To eliminate double taxation, France in principle exempts income the taxation of which is allocated to Portugal, subject to the effective rate, and grants a tax credit for dividends, interest, royalties and certain other income. Portugal grants a deduction equal to the French tax, limited to the lower of the portions of French tax and of Portuguese tax attributable to that income. Income not expressly mentioned is taxable only in the State of residence, provided that it is subject to tax there. S27S08

72. The consolidated version includes a principal purpose test, derived from the Multilateral Convention, which allows a treaty benefit to be denied where obtaining that benefit is one of the principal purposes of an arrangement or transaction. It also preserves Portugal's application of its domestic controlled foreign company rules in Article 66 of the CIRC and Article 20 of the CIRS. Outside the treaty, Law n.º 26/2026 amended the heading of the CIRS article that requires crypto-asset service providers to report annually to the tax authority, no later than 31 May, information on their resident users. S27S01

73. Income tax treaties do not cover IMT, IMI or AIMI: the 10% and 7.5% rates linked to the Portuguese lists of clearly more favourable tax regimes, excluding individuals, apply independently. For investment income, the 35% rate remains capped, where applicable, by the treaty in force with the recipient's State of residence. S06S24S25S27

12. Illustrative cases and limits of application

74. Case 1. A French engineer, with no Portuguese residence for ten years, moves to Lisbon in March 2026 to work for an exporting company. He becomes resident from his first day of stay if he meets a criterion in Article 16. The RNH requires a transitional category; the IFICI requires an eligible position and proper registration. Failing that, his salaries are taxed under the scale in Article 68. S02S13S03

75. Case 2. A French retiree, formerly a private-sector employee, becomes resident in Portugal in 2026 and receives French-source pensions. The treaty allocates the taxation of the private pension to the State of residence; Portugal then taxes it under its domestic rules, without the former RNH regime being available to him in principle. A French public pension remains in principle taxable in France, unless the retiree has Portuguese nationality (Article 20, §2). S27S28S02

76. Case 3. A Portuguese holding company whose financial year begins on 1 January 2026 receives dividends from a French subsidiary in which it has held 40% for three years and makes a taxable profit of 2 million euros. The dividends may be excluded from profit if the conditions of Article 51 are met. The profit bears 19%, or 15% on the first 50,000 euros if the holding company is an eligible SME, and, if its main activity is commercial, industrial or agricultural, the municipal derrama up to a limit of 1.5% and the derrama estadual of 3% above 1.5 million euros. S17S15S20S16

77. Case 4. A resident of Dubai, who is not resident in Portugal, acquires through a company held from the Emirates a Lisbon flat used by his family. On the acquisition, the company, being non-resident, in principle bears IMT of 7.5% under Article 17, n.º 10, unless an exception applies; if the company or its controlling entity falls within the list of clearly more favourable tax regimes, IMT is 10% and IMI 7.5%; AIMI is increased to 7.5% only if the owning company is itself subject to a more favourable tax regime, as Article 135-F does not cover an entity that is merely controlled. Even outside that scenario, personal use by the shareholders subjects the property held by the company to the progressive personal AIMI rate. S24S25S29

78. Case 5. A parent resident in France gives his or her child a flat in Porto. The child is exempt under verba 1.2, but the gift of real estate falls under verba 1.1 at 0.8%. French gift tax is examined separately, as no inheritance tax treaty has been identified. S26

79. This factsheet does not exhaustively cover deductions from IRS tax liability, social security contributions, simplified regimes, crypto-assets beyond the points mentioned, the regional rates of the Azores and Madeira, sectoral regimes or reporting obligations. S01S14S23

80. The RNH transitional rules and the IFICI depend on regulatory texts that have not been read; the former wording of Article 16 and the portaria under Article 58-A must be consulted before any individual conclusion is reached. S02S13

Sources

• S01: IRS Code (CIRS), consolidated PDF version on the Portal das Finanças
• S02: CIRS, Article 16 (residence), Portal das Finanças page
• S03: CIRS, Article 68 (general rates), Portal das Finanças page
• S04: CIRS, Article 12-B (IRS Jovem), Portal das Finanças page
• S05: CIRS, Article 12-A (former residents), Portal das Finanças page
• S06: CIRS, Article 71 (final withholding rates), Portal das Finanças page
• S07: CIRS, Article 72 (special rates), Portal das Finanças page
• S08: CIRS, Article 81 (international double taxation), Portal das Finanças page
• S09: CIRS, Article 10-A (loss of resident status), Portal das Finanças page
• S10: CIRS, Article 18 (Portuguese-source income), Portal das Finanças page
• S11: CIRS, Article 43 (capital gains), Portal das Finanças page
• S12: Estatuto dos Benefícios Fiscais (EBF), consolidated PDF version on the Portal das Finanças
• S13: EBF, Article 58-A (incentive for scientific research and innovation), Portal das Finanças page
• S14: IRC Code (CIRC), consolidated PDF version on the Portal das Finanças
• S15: CIRC, Article 87 (rates), Portal das Finanças page
• S16: CIRC, Article 87-A (derrama estadual), Portal das Finanças page
• S17: CIRC, Article 51 (elimination of economic double taxation), Portal das Finanças page
• S18: CIRC, Article 14 (other exemptions), Portal das Finanças page
• S19: CIRC, Article 83 (transfer of residence), Portal das Finanças page
• S20: Lei n.º 73/2013, financial regime of local authorities, consolidated version
• S21: IVA Code (CIVA), consolidated PDF version on the Portal das Finanças
• S22: CIVA, Article 18 (rates), Portal das Finanças page
• S23: Lei Orgânica n.º 2/2013, finances of the autonomous regions, Article 59 (consolidated version)
• S24: IMT Code (CIMT), consolidated PDF version on the Portal das Finanças
• S25: IMI Code (CIMI), including AIMI, consolidated PDF version on the Portal das Finanças
• S26: Imposto do Selo Code (CIS) and Tabela Geral, consolidated PDF version on the Portal das Finanças
• S27: France–Portugal Convention of 14 January 1971, consolidated version (2016 protocol and MLI)
• S28: BOFiP, BOI-INT-CVB-PRT-10-20: taxation rules for the various categories of income
• S29: Decreto-Lei n.º 97/2026 of 20 May 2026, tax measures for housing supply (Diário da República, 1.ª série)