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Category B — Self-Employment Income
Self-employment and business income. Freelancers and sole traders taxed under simplified regime or organized accounting.
Legal basis: Art. 3–4, 28–47 CIRS
Category B (Categoria B) covers income from independent professional activities, freelancing, sole-trader businesses, and other self-employment. Taxpayers choose between the simplified regime (regime simplificado) and organized accounting (contabilidade organizada). The simplified regime applies fixed coefficients to gross income to determine the taxable base — for most professional services, 75% of gross is taxable. Organized accounting allows deducting actual documented business expenses and is mandatory above €200,000 annual gross. Category B taxpayers must make quarterly advance tax payments (pagamentos por conta) and are subject to social security contributions on self-employment income.
Example
A freelance consultant billing €80,000/year under the simplified regime has a taxable base of €60,000 (75% coefficient). This €60,000 is then subject to the progressive IRS brackets.
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