IRS in Portugal: Complete Guide to Income Tax in 2026

Anyone who resides in the country and earns income, whether Portuguese or foreign, must submit their annual income tax return to the State — the IRS.

Has the time come to file your IRS in Portugal and you are unsure how to proceed? In this article, we explain everything you need to know about the subject. After all, anyone who resides in the country and earns income, whether a Portuguese citizen or a foreigner, must submit their annual income tax return to the State. The amount of tax to be paid is calculated based on the taxpayer’s income.

The IRS is administered by the Portuguese Tax and Customs Authority (Autoridade Tributária e Aduaneira – AT) and is one of the main sources of revenue for the Portuguese government. The rules are set out in the IRS Code and may change from year to year — therefore, it is essential to keep track of updated deadlines and tax tables.

Pay attention to the 2026 deadlines (return referring to income earned in 2025) to avoid fines and losing deductions.

And if you need support from a specialist, contact Atlantic Bridge! The first consultation is free!

What is the IRS in Portugal?

IRS stands for Imposto sobre o Rendimento de Pessoas Singulares (Personal Income Tax). It is the tax paid on income earned by individuals in many countries, including Portugal. It is annual and is levied based on the taxpayer’s income.

Who needs to file an IRS – Personal Income Tax?

All tax residents with income, even if it is exempt (salary, pensions, capital gains), must file an IRS return. Based on this information, the Portuguese Tax and Customs Authority (AT) calculates the amount of tax due.

What is the deadline for filing IRS returns in 2025?

The IRS return must be submitted between April 1 and June 30, 2026, referring to income earned in 2025.

Important IRS Dates for 2026

Important Dates for IRS 2026 (Tax Calendar)

Every year, the Portuguese Tax and Customs Authority publishes the IRS filing calendar on its website. In 2026, in addition to the return submission deadline, it is important to pay attention to other key dates:

Until February 16, 2026

Report the duration or termination of a long-term lease agreement (when applicable).

Until March 2, 2026

Report/update the household composition (changes that occurred in 2025).
Confirm invoices on the e-Fatura portal (for deductions).
Report rental income received in 2025 through Declaration Modelo 44 (for landlords exempt from issuing electronic receipts).
Report education expenses incurred in inland areas / autonomous regions (when applicable).

Until the end of March 2026

Indicate the entity to which you wish to allocate (consign) your IRS/IVA (VAT), or both.

From March 16 to March 31, 2026

Review deductible expenses calculated by the Tax Authority and submit claims regarding expenses/invoices (if there are omissions or inaccuracies).

From April 1 to June 30, 2026

Submit IRS 2026 (income earned in 2025) — confirm the Automatic IRS or submit Modelo 3.

Until July 31, 2026

Deadline for the Tax Authority to issue the IRS 2026 tax assessment notice, indicating whether there is additional tax to pay or a refund to receive.

Until August 31, 2026

Receive the refund / pay the tax due (for returns submitted within the legal deadline).

Do foreigners need to pay IRS?

Yes, they need to declare those who:

• Have resided in the country for a period of at least 183 days (consecutive or not) during a fiscal year (January 1st to December 31st).
• Even if they have been in the country for less than 183 days a year, they are tax resident in Portugal.
• Obtain certain income in Portugal.
  

Do foreign retirees need to pay income tax?

Yes, if they fall under the situations mentioned earlier.

The Portuguese government has historically offered attractive tax incentives for retirees, such as the Non-Habitual Resident (NHR) status, which allowed a flat rate of 10% on pensions and retirement income for the first 10 years of fiscal residence. The rules of the program have been adjusted over time, so it’s important to check the current conditions at the time of registration to ensure the best possible tax arrangement.

In the NHR 2.0 program, the current version, pensions and retirement income are subject to the progressive income tax table, instead of the previous flat 10% rate. Those who registered under the old model remain under the rules that were in place when they joined.

Additionally, it’s crucial to be aware of your tax situation in your home country to ensure compliance with all obligations and avoid issues. For more details, check out our full article on the precautions when declaring IRS as a Non-Habitual Resident.

Who is exempt from filing the IRS?

Taxpayers are exempt from the obligation to submit the IRS declaration if they only have the following types of income:

• Income from dependent employment or pensions, provided that the total amount does not exceed 8,500 euros and has not been subject to withholding tax. In the case of alimony payments, the limit is 4,104 euros.
  
• Income subject to final withholding tax, such as interest from bank deposits or investments, provided that it is not aggregated for taxation purposes, when permitted.
  
• Subsidies or grants under the Common Agricultural Policy (CAP), provided that the amount is less than 2,148.52 euros (corresponding to 4 × IAS in 2026). These amounts may be combined with dependent employment income, pensions, or income subject to final withholding tax, as long as the total does not exceed 4,104 euros, where applicable.
  
• Income from occasional isolated acts, provided that the annual amount does not exceed 2,148.52 euros (4 × IAS in 2026).
  

* The IAS value in 2026 is 537.13 euros.

Who is not exempt?

Even if the income falls under the above criteria, the IRS declaration is still mandatory in the following situations:

• If you have assets held in countries, territories or regions with a clearly more favorable tax regime.
• If you have income, even if exempt, of more than 8,500 euros.
• When the taxpayer opts for joint taxation.
• If you receive temporary or lifetime income that is not related to retirement, old age, invalidity or survivor’s pensions.
• When there is income in kind, such as benefits provided by the employer, including use of a company car or housing provided by the employer.
• If you receive maintenance payments of more than 4,104 euros.

How much IRS to pay: rates and brackets

To calculate IRS, the taxpayer must follow a rate table provided by the government. It is structured into nine brackets with their respective rates. IRS brackets are ranges of taxable income — the higher the income, the higher the rate, meaning the percentage to be paid on earnings.

ATTENTION: In 2026, the IRS brackets were adjusted by 3.51% to reflect inflation and wage increases. In addition, the rates from the 2nd to the 5th brackets were reduced by 0.3 percentage points, easing the tax burden on middle-income earners.

At the same time, the withholding tax tables were adjusted to bring the monthly tax withheld closer to the actual amount due at the end of the year. This resulted in higher net income throughout the year, but also generally lower refunds — without representing an actual tax increase, only a more balanced settlement over the year.

IRS Brackets for 2026

IRS 2026 Tax Brackets

What income is exempt from IRS?

It is foreseen in the Personal Income Tax Code the exemption from of tax on some incomes. Among the most common we can mention:

• Scholarships awarded to dependent students, up to the annual global limit of 5 × IAS (in 2026: 5 × 537.13 € = 2,685.65 €).
• Income covered by the IRS Jovem (Youth IRS) regime, applicable to young people between 18 and 35 years old (subject to specific legal conditions).
• Income from occasional isolated acts, provided it does not exceed 4 × IAS (in 2026: 2,148.52 €), when legal requirements are met.
• Reimbursement for using personal vehicles for work purposes (within the legal limits set).
• Social passes fully covered by the employer.
• Health or sickness insurance provided to employees.
• Meal allowances, unemployment benefits, social integration income (RSI), and family allowances.
• Income from dependent work or pensions up to 8,500 euros annually (if there are no other income sources), which have not been subject to withholding tax, and do not include alimony pensions above 4,104 euros.
• Severance pay (depending on the amount and conditions of the dismissal).
• Pensions and compensation for bodily injury, illness, or death paid or granted by the state.
• Income from former residents, as long as they meet the requirements for this IRS exemption.
• Literary, artistic, or scientific prizes (as long as they do not result from a professional relationship).
• Scholarships and prizes awarded to high-performance athletes and coaches.
• Wealth increases from gratuitous transfers subject to Stamp Duty.
• Wealth increases from gratuitous transfers subject to Stamp Duty, such as inheritances and donations.

Want help declaring your IRS? Click here!

What expenses are deductible from the IRS?

It is precisely when reviewing deductible expenses for income tax purposes that taxpayers realize how important it is to request invoices with their NIF. Many expenses can reduce the amount of tax payable each year.

Among others, the following may be considered:

• General family expenses
• Health expenses
• Education and training
• Property-related expenses (interest on old mortgage loans and rent payments)
• Alimony payments
• Gym expenses
• Nursing home expenses (relating to support for the elderly or people with disabilities)
• VAT paid in certain sectors (restaurants, accommodation, car repairs, hairdressers, veterinarians, among others)

Expenses related to education, health, real estate, alimony, nursing homes education, health, real estate, alimony, nursing homes, VAT and general family expenses. These deductions can make the difference between paying additional tax or receiving a refund!

It is important to remember that there are limits deduction limits that vary depending on the income tax bracket you are in, as described in the CIRS.

How to File Income Tax in Portugal?

The IRS declaration must be made directly on the IRS website. You must have a NIF, which is the Tax Identification Number in Portugal. In addition, you must also make a prior registration on the IRS site, whose access password will be sent to your address.

• Log in to the Portal das Finanças using your NIF and password;
• Go to “Submit” → “Declarations” → “IRS”;
• Under “Submit Declaration,” choose “Submit the 1st Declaration and Replacement Declarations”;
• Click on “Fill in Declaration”;
• Select the year (income earned in 2025);
• In the “assistant,” choose: pre-filled declaration / import file / last submitted declaration / blank declaration;
• Fill in the Cover Page (“Rosto”) and the required Annexes (according to your situation);
• Click “Validate”;
• If there are no errors, click “Submit”;
• Download the proof of submission.

Important Tips:

To avoid penalties, you have to be very careful when filing your income tax return in Portugal.

• don’t leave your declaration until the last minute. Fill out the form early and calmly;
• go to the Tax Authority’s website and read about it before you start filling out ;
• separate in advance the documents and proofs of your income for the year you are going to declare;
• if you are married or living in a stable union, analyze if it is worthwhile to send the joint declaration. It is possible to do a simulation before submitting the IRS;
• make the submission before the deadline, so you can make changes if you have made mistakes, without losses or fines;
• when you opt for the automatic IRS declaration, confirm the information before sending it;
• check the IBAN (international bank account) number to receive your refund in the time stipulated by the agency;
• if you don’t feel confident about filing your tax return by yourself, seek professional help.

What is the minimum existence threshold and how does it work in IRS 2026?

The minimum existence threshold is a mechanism provided for in Article 70 of the IRS Code that ensures no taxpayer is left with an annual net income below a certain amount considered essential for subsistence.

In 2026, this amount corresponds to €12,880 per year, equivalent to the annual national minimum wage (€920 × 14 months). The law establishes that the minimum existence must correspond to the higher of the annual minimum wage or 1.5 × 14 × IAS. Since the IAS in 2026 is €537.13, the reference value is the annual minimum wage (€12,880).

Where is this measure applied?

The minimum existence threshold is applied during the tax calculation process, before the final assessment. If, after deductions, the available income falls below the reference value, an automatic deduction is made to the taxable income, reducing or eliminating the tax due.

It is important to highlight that:

It does not mean that anyone earning up to €12,880 is automatically exempt from IRS;
It means that the system adjusts the tax to ensure that net income does not fall below that amount;
The deduction is automatically applied by the Tax Authority after the return is submitted.

This mechanism is particularly relevant for workers and pensioners with lower incomes, functioning as a built-in tax protection within the IRS calculation itself.

What happens if you submit the return late?

Late filing of the IRS return can generate fines up to 3,750 euros. In addition, late taxpayers still lose the right to deductions for general family and health expenses.

Another disadvantage is the loss of the IMI exemption, for those who have the right.

Finally, if those who have any amount to be refunded, they will have to wait longer to receive the money they overpaid in tax.

Am I required to declare income earned abroad?

Yes. Tax residents in Portugal are subject to the principle of worldwide taxation, meaning they must declare all income, regardless of whether it was earned in Portugal or abroad.

This includes, for example:

Salaries received outside Portugal
Pensions paid by another country
Self-employment income
Rental income from property abroad
Interest, dividends, and other capital income
Capital gains (sale of property or assets outside Portugal)

These amounts must be declared in Annex J of the IRS return.

Important: declaring does not mean paying tax twice.
Portugal has double taxation agreements with several countries. Tax paid abroad may be deducted, or the exemption method may apply, depending on the case. Speak with a specialist.

What if I don’t submit the declaration or make mistakes?

Errors or omissions in the annual tax return are punishable by a fine of between 375 euros and 22,500 euros, which can be increased by between 30% and 100% of the missing tax, in accordance with article 119 of the General Regime of Tax Infringements (RGIT). The amount of the fine is set according to several factors:

• Time elapsed until the violation is corrected
• Severity of the fact;
• Taxpayer’s fault;
• Economic situation of the taxpayer.

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