Portugal Tax Rates 2026: Income Tax, Corporate Tax, VAT & Capital Gains

Portugal individual income tax rates - 2026

For mainland Portugal, the general IRS scale for 2026 has nine brackets. The tax calculation uses the normal marginal rate for the part falling in the relevant bracket together with the corresponding average-rate mechanism prescribed by Article 68 of the Portuguese Personal Income Tax Code.

Current position: The older five-band schedules are obsolete. Portugal now uses a nine-band mainland IRS scale for 2026.

Additional solidarity tax

In addition to the general IRS rates, an additional solidarity rate applies to high taxable income. The rate is 2.5% on the portion of taxable income above €80,000 and up to €250,000, and 5% on the portion exceeding €250,000, subject to the statutory rules for joint taxation.

Tax residence and non-resident taxation

Portuguese tax residents are generally subject to IRS on worldwide income, subject to exemptions, credits and applicable double-tax treaties. Non-residents are generally taxed only on Portuguese-source income.

Residence status depends on the statutory tests in the Portuguese IRS Code, including physical presence and availability of a dwelling indicating an intention to hold and occupy it as a habitual residence. Tax-treaty tie-breaker rules may apply where a person is resident in more than one country.

Selected non-resident rates

Specified Portuguese-source income of non-residents may be taxed at flat rates. The current IRS Code applies a 28% autonomous rate to various non-resident income and capital-gain categories not attributable to a Portuguese permanent establishment and not already subject to final withholding. Income attributable to a Portuguese permanent establishment is generally subject to a 25% autonomous rate for individuals under the relevant IRS rule.

Income from residential leases is generally subject to a 25% autonomous rate, with statutory reductions for qualifying longer-term permanent-housing leases. Non-housing rental income is generally subject to the applicable special-rate rules.

IFICI incentive and the former Non-Habitual Resident regime

The former Non-Habitual Resident (NHR) regime was repealed from 1 January 2024, subject to transitional protection for qualifying taxpayers already within the regime or covered by the transitional rules.

The current Tax Incentive for Scientific Research and Innovation (IFICI) is available to qualifying individuals who become Portuguese tax residents and satisfy the statutory activity and prior-residence conditions. Eligible Portuguese-source category A and B income may be taxed at a special 20% rate for up to 10 consecutive years. Foreign-source income can benefit from the separate IFICI rules, subject to exclusions and anti-avoidance provisions.

Portugal corporate income tax - IRC

For tax periods beginning during 2026, the standard corporate income-tax rate is 19% in mainland Portugal and Madeira. The standard rate in the Azores is lower under the regional rules.

Municipal surtax and state surtax can increase the effective corporate burden depending on location and taxable profit. Special regional, investment and incentive regimes may also apply.

Capital gains tax in Portugal

Capital-gain taxation depends on the taxpayer, residence status and asset. For individuals, the positive balance of many securities and financial-asset gains is generally subject to a 28% autonomous rate, although mandatory aggregation can apply in specified cases and residents may be able or required to aggregate certain income.

Capital gains from Portuguese real estate are subject to separate rules. Resident individuals generally include the taxable portion of the gain in aggregate IRS income, while non-resident real-estate gains are subject to the specific aggregation and calculation rules currently in the IRS Code. Treaty provisions may affect international cases.

Withholding tax in Portugal

For individual investment income, the Portuguese IRS Code generally applies a 28% final withholding rate to specified capital income, including qualifying interest and dividends, subject to statutory exceptions, aggregation elections and applicable tax treaties.

For payments to non-resident corporate entities, the Portuguese Corporate Income Tax Code generally prescribes a 25% withholding rate on covered Portuguese-source income, unless an exemption, EU directive or double-tax treaty reduces or eliminates the withholding.

Portugal Value-Added Tax (VAT)

For mainland Portugal, the VAT rates are 23% standard, 13% intermediate and 6% reduced. The Autonomous Regions of the Azores and Madeira may apply lower regional VAT rates under their legislation.

Portugal tax-return filing deadlines

Individuals

The annual IRS Modelo 3 return is generally filed electronically from 1 April to 30 June of the year following the tax year. This filing window applies irrespective of whether the final day is a business day.

Non-residents generally need to file a Portuguese IRS return where they receive Portuguese-source income that was not subject to final withholding, subject to the statutory filing exemptions.

Companies

For companies using the calendar year, the annual corporate income-tax return is generally submitted by 31 May of the following year. Where a company uses a different tax period, the deadline generally falls on the last day of the fifth month following the end of that period.