IRS Jovem (Youth IRS)
- Duration
- 10 years
- Legal basis
- Art. 2-B CIRS
Eligibility
- Aged 35 or under
- Not classified as a dependent for IRS purposes
- Income from Cat. A (employment) or Cat. B (self-employment)
What is IRS Jovem?
IRS Jovem is a Portuguese income tax exemption for young workers aged 35 or under. It provides a sliding-scale partial exemption on Cat. A (employment) and Cat. B (self-employment) income over 10 consecutive years, starting from the first year the taxpayer is no longer classified as a fiscal dependent.
The regime was significantly expanded by the 2025 reform, which extended the duration from 5 to 10 years and raised exemption percentages, making it one of the most valuable tax benefits available to young professionals in Portugal.
Exemption schedule
The exemption applies to a portion of gross Cat. A / Cat. B income each year:
| Year(s) | Exemption |
|---|---|
| Year 1 | 100% |
| Years 2–4 | 75% |
| Years 5–7 | 50% |
| Years 8–10 | 25% |
In year 1, 100% of qualifying income is exempt from IRS — subject to the annual cap. From year 2, the exemption steps down progressively until year 10.
Annual cap
The exemption is capped at 55 × IAS per year. Using the 2025 IAS value of €522.50, the annual cap is €28,737.50. Income above the cap is taxed at standard progressive IRS rates (up to 48% marginal rate).
The cap applies to the exempt portion — not total income. A taxpayer earning €60,000 in year 1 would have €28,737.50 fully exempt and the remaining €31,262.50 taxed at progressive rates.
What IRS Jovem does not cover
IRS Jovem applies only to Cat. A and Cat. B income. Investment income (Cat. E), rental income (Cat. F), capital gains (Cat. G), and pensions (Cat. H) are unaffected and taxed under their normal rules regardless of IRS Jovem status.
Age and dependency conditions
- The taxpayer must be aged 35 or under at the start of the tax year.
- The taxpayer must not be classified as a fiscal dependent of another taxpayer’s household (agregado familiar) for IRS purposes. This typically means the 10-year window begins in the first year the individual files independently.
- The regime applies automatically once the conditions are met — no separate AT registration is required, unlike NHR or IFICI.
IRS Jovem vs special residency regimes
IRS Jovem and IFICI target different profiles. IFICI is most valuable for high-earning professionals in R&D or qualifying roles — the 20% flat rate beats progressive rates for any income above approximately €29,000. IRS Jovem offers greater relief at the bottom of the income scale (100% exempt in year 1, capped at ~€28,737) and requires no AT approval.
The two regimes address different taxpayer profiles and generally cannot be combined on the same income: a taxpayer enrolled in IFICI pays 20% flat on qualifying income; IRS Jovem would provide a partial exemption on top of that, but the interaction depends on individual circumstances.
Use the calculator to compare the effective tax outcome under each regime for your specific income level.