The main taxes in Portugal are the personal and corporate income taxes and the value-added tax (VAT), which is levied on transactions in goods and services. There are also real estate transfer taxes and property ownership, customs duties and some excise duties, such as the car tax and the tobacco tax.
The largest source of state revenue comes from VAT, income taxes and social security contributions.
Tax rates in Portugal are, to a great extent, in line with the rates of most EU countries.
The corporate income tax rate is 20%. A municipal surcharge of up to 1.5% and a State surcharge ranging from 3% to 9% applied only to companies with an income worth more than €1.5 million.
Personal income tax rates range from 13% to 48%. Social security contributions are 34.75% of the income, of which 23.75% is paid by the employer and 11% by the employee.
VAT rates range from 6% to 23% in the Portuguese mainland and 4% to 22% in regions of Azores and Madeira.
Income obtained abroad by Portuguese residents and in Portugal by non-residents might be taxed in Portugal.
To avoid double taxation, Portugal has double taxation agreements with more than 85 countries, such as the United States of America, Poland, Russia, China, Canada and Germany.
The tax system in Portugal is monitored by the Tax and Customs Authority (Autoridade Tributária e Aduaneira), which is responsible for the management of taxes according to the rates defined by the tax legislation approved by the Parliament.
General tax rules are applied nationwide, but the autonomous regions of Azores and Madeira enjoy fiscal autonomy, which is why the rates of some taxes are lower in these regions than the rates applicable in mainland Portugal. Municipalities can obtain their own revenues through municipal taxes regarding the provision of certain municipal services or for the use of municipal assets.
Relevant legislation
Personal Income Code [Portuguese Only]
Corporate Income Code [Portuguese Only]
Value Added Tax Code [Portuguese Only]
Forms
Personal Income Tax Return – Form 3 [Portuguese Only]
Corporate Income Tax Return – Form 22 [Portuguese Only]
Vaue Added Tax Periodic Declaration [Portuguese Only]
Other documents
Tax and Customs Authority: «2018 Tax payment Obligations Calendar» [Portuguese Only]
Tax and Customs Authority: «Tax Periodic Declarations Calendar» [Portuguese Only]
List of Double Taxation Treaties [Portuguese] [English]
Macedo Vitorino's briefings
«Taxation in Portugal made easy» (2019)
«2022 Portuguese State Budget Proposal»
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