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Portugal Tax Glossary

Plain-English definitions of key Portuguese income tax terms. Click any term for the full explanation with legal basis and worked examples. Updated for 2026.

AT — Autoridade Tributária

The Portuguese Tax and Customs Authority. Administers IRS, issues NIF numbers, and approves special regime applications.

Category A — Employment Income

Employment income — salaries, wages, and directors' remuneration. Subject to withholding tax by the employer.

IFICI regime →

Category B — Self-Employment Income

Self-employment and business income. Freelancers and sole traders taxed under simplified regime or organized accounting.

Freelancer tax guide →

Category E — Investment Income

Capital and investment income — interest, dividends, and profit distributions. Often taxed at a flat 28% autonomous rate.

Category F — Rental Income

Rental income from real estate. Taxed at 28% flat by default, with reductions for long-term leases.

Long-term rental strategy →

Category G — Capital Gains

Gains from selling property, shares, crypto, and other assets. Crypto held 365+ days is currently exempt.

Crypto 365-day exemption strategy →

Category H — Pension Income

Pension income. Taxed at progressive rates with a pension-specific deduction. Foreign pensions under NHR were taxed at 10%.

NHR Legacy regime → NHR foreign pension strategy →

CIRS — Código do IRS

The Portuguese personal income tax code. The primary legislation governing IRS calculation, deductions, and rates.

EBF — Estatuto dos Benefícios Fiscais

The tax benefits statute. Legal home for special regimes like IFICI (Art. 58-A) and NHR Legacy (Art. 16).

IFICI regime → NHR Legacy regime →

Effective Tax Rate

Total tax paid divided by total gross income. Always lower than the marginal rate.

IFICI — NHR 2.0

Portugal's current special regime for qualifying professionals. 20% flat rate on Portuguese-source income for 10 years.

IFICI regime details → IFICI flat rate strategy →

IRS — Imposto sobre o Rendimento das Pessoas Singulares

Portuguese personal income tax. The main income tax for individuals, covering categories A through H.

IRS Jovem

A reduced-rate regime for workers under 35 in their first years of employment. Progressive exemption tapering over time.

IRS Jovem regime details →

Marginal Tax Rate

The rate applied to the last euro of income — the highest bracket reached. Top rate is 48% plus up to 5% solidarity surcharge.

Municipal Surcharge — Derrama Municipal

An IRS participation rate set by each municipality, up to 1.5% of taxable income. Lisbon and Porto charge the maximum.

All municipality rates →

NHR Legacy — Non-Habitual Resident

Portugal's previous special regime (Art. 16 EBF). Closed to new applicants in January 2024. Existing holders retain benefits for 10 years.

NHR Legacy regime details → IFICI vs NHR Legacy →

NIF — Número de Identificação Fiscal

Portuguese tax identification number. Required for any tax filing, opening a bank account, or registering as a tax resident.

Organized Accounting — Contabilidade Organizada

Alternative to simplified regime for Cat. B taxpayers. Requires a TOC and allows deducting actual business expenses.

Retenção na Fonte — Withholding Tax

Tax deducted at source by an employer before net payment. Credited against the final annual IRS liability.

Simplified Regime — Regime Simplificado

Cat. B taxation method using fixed coefficients. The coefficient for Art. 151 professional services is 0.75 — 75% of gross is taxable.

Simplified regime strategy →

Solidarity Surcharge — Taxa de Solidariedade

Additional surcharge on high incomes: 2.5% on €80k–€250k, and 5% above €250k.

Standard IRS

The default progressive income tax regime applying 2026 brackets (12.5% to 48%) with standard deductions.

Standard IRS regime → Portugal tax calculator →

183-Day Rule

The primary test for Portuguese tax residency. Spend 183+ days in Portugal in a calendar year and you are a tax resident.

Agregação Familiar — Joint Filing

Married or civil-partnered couples may file jointly. Income is divided by 2, tax calculated, then doubled — the quotient conjugal.

Autonomous Tax Rate — Taxa Autónoma

Flat tax rates applied to specific income types independently of progressive brackets. Common rates: 28% (Cat. E/F), 25% (non-residents).

Crypto-Asset Taxation

Crypto held 365+ days is exempt from IRS. Held less than 365 days: 28% on gains. Mining and staking: Category B.

Crypto 365-day exemption →

Double Taxation Treaty — DTT

Bilateral treaties preventing the same income from being taxed twice by two countries. Portugal has 79 active treaties.

Expat country guides →

Englobamento — Income Aggregation Election

The election to include Cat. E or F income in the progressive IRS calculation instead of the default 28% flat rate.

Fiscal Residency — Residência Fiscal

Tax residency status in Portugal. Required to access special regimes (IFICI, NHR). Triggers worldwide income taxation.

Foreign Income Exemption

Under NHR Legacy, qualifying foreign-source income was exempt from Portuguese IRS. IFICI does not provide this exemption.

NHR foreign income exemption strategy → IFICI vs NHR Legacy comparison →

Foreign Tax Credit — Crédito de Imposto por Dupla Tributação

Credit against Portuguese IRS for taxes paid abroad on the same income. Prevents double taxation under Portugal's DTTs.

Foreign tax credit strategy →

Golden Visa — Visto Gold

Portugal's investment residence permit. Grants residency rights but does NOT automatically confer tax residency or NHR/IFICI access.

Golden Visa tax guide →

Habitual Residence — Habitação Habitual

A secondary test for Portuguese tax residency. Having a home in Portugal on 31 Dec triggers residency, even with fewer than 183 days.

IAS — Indexante dos Apoios Sociais

Social support index. Used as a reference value for computing various tax and social security thresholds in Portugal.

Modelo 3 — Annual IRS Return

The annual personal income tax return form filed with AT, typically between April and June following the tax year.

Pension Deduction — Dedução Específica de Pensões

A specific deduction for Category H pension income. Up to €6,430 in 2026, phased out at higher pension levels.

Portal das Finanças

AT's online portal for tax filing, NIF management, withholding tables, and all official tax interactions.

PPR — Plano Poupança Reforma

Portuguese pension savings plan. Contributions generate a 20% tax credit (capped at €400/year) — more for under-35s.

PPR tax credit strategy →

Quarterly IRS Payments — Pagamentos por Conta

Advance IRS payments required for Cat. B self-employed taxpayers. Made in July, September, and December.

Real Estate Capital Gains

Gains from selling property in Portugal. 50% of gain is taxable for residents. Primary residence gains can be reinvested tax-free.

Social Security — Segurança Social

Mandatory contributions for employees (11%) and self-employed (14.98% for services). First 12 months exempt for new self-employed.

TOC — Técnico Oficial de Contas

Portugal's certified accountant. Required for organized accounting; helpful for complex IRS situations and IFICI applications.

HVAA — High Value Added Activities

Activities qualifying for special regime flat rates. IFICI requires AT certification of a qualifying activity.

IFICI eligible professions guide →

IMI — Imposto Municipal sobre Imóveis

Annual property tax on real estate in Portugal. Rates range 0.3%–0.45% (urban) and 0.8% (rural) of the fiscal value.

IMT — Imposto Municipal sobre Transmissões

Property transfer tax paid by the buyer when purchasing property in Portugal. Rates up to 8% depending on price and use.

IVA — Imposto sobre o Valor Acrescentado (VAT)

Portuguese VAT. Standard rate 23%, reduced 13% and 6% for essential goods. Freelancers below €15k/year may be VAT-exempt.

D7 Visa — Passive Income Visa

Portugal's residence visa for those with passive income (pensions, rentals, dividends). Requires minimum income proof and local accommodation.

D7 Visa tax guide →

D8 Visa — Digital Nomad Visa

Portugal's remote worker visa for non-EU nationals employed by or contracting with foreign companies.

D8 Digital Nomad tax guide →

Category B Simplified Regime Coefficients

Fixed multipliers applied to gross Cat. B income to determine the taxable base. Most services: 0.75 (75% taxable).

Income Splitting — Quociente Conjugal

Joint filers divide combined income by 2, compute tax, then multiply by 2. Reduces the marginal rate when incomes differ significantly.