2026 Tax Guide – PIT

PIT taxable persons

Persons covered by PIT and respective taxation

_{(*) The Non-Habitual Residents (RNH) regime was revoked effective as from 1 January 2024. However, the regime is still applicable to those who:
(i) were already registered as RNH w up to 1 January 2024; or
(ii) that by 31 December 2023 met the conditions to be registered  as  RNH. The regime is also applicable to individuals who become tax residents until 31 December 2024 provided certain conditions are met.
(**) With a limit for those who become tax residents as from1 January 2024.}

PIT categories of income

PIT rates

Withholding tax rates applicable in 2026

 Category A (employment income) and Category H (pensions)

PIT deductions

<sub>(1) Assuming that both taxpayers are disabled.
(2) If the expenses mentioned occur simultaneously in i) and ii), the limit is € 1,100 instead of € 800.
(3) The amount of the education and training expenses incurred by students attending education institutions located in inland regions ( as identified in Decree 208/2017 of 13 July), shall be increased by 10%. In addition, the overall cap of the tax deduction for education and training expenses shall be increased from € 800 to € 1,000, if the difference relates to the said expenses.
(4) The limit is increased to the following amounts, being the taxable income, in the case of joint taxation, the amount that results from the application of the divisor foreseen in Article 69 of the PIT Code: 
1. For taxpayers who have a taxable income equal to or lower than the amount from the first bracket of paragraph 1 of article 68, an amount of € 1,100; 
2. For taxpayers who have a taxable income greater than the value of the first bracket of paragraph 1 of Article 68 and equal to or lower than € 30,000, the limit resulting from the application of the following formula: € 700 + [€ 1,100 - € 700 ) x [(€ 30,000 - taxable Income)/(€ 30,000 -value of the first bracket)]]
(5) This limit is increased to € 1,000 for 3 years (the first year being the one of conclusion of the contract), if these expenses derive from the transfer of permanent residence to an inland territory (as defined in Decree 208/2017 of 13 July).
(6) A taxpayer granting donations of an amount exceeding € 50,000 (i) which respective tax liability in the year concerned is lower than the amount of the allowed deduction or (ii) that reaches the cap of the deduction (15% of the tax liability), can carry the amount of the deduction forward for the following three years, capped at 10% the tax liability in each of the tax years concerned.
(7) The deduction is allowed in respect to expenses incurred with the following services:
  - maintenance and repair of motor vehicles;
  - maintenance and repair of motorcycles and related parts and accessories;
  - accommodation and food service activities;
  - hairdressers and beauty salons;
  - veterinarian expenses including medicines;
  - retail sale of books in specialized stores;
  - theatre, music, dance, and other artistic and literary activities;
  - operation of performance venues and related activities;
  - library and archive activities;
  - museum activities;
  - activities of historical sites and monuments.
(8) Includes health and insurance expenses, education and training expenditures, retirement home fees, deduction for requesting the issuance of an invoice, costs with immovable property, alimony expenses and tax benefits. In households with three or more dependents, the above limits are increased by 5% per dependent or civil godson, which is not a taxpayer.
(9) For the remaining cases, the global limit is determined based on the following formula:
€ 1,000 + [(€ 2,500 - € 1,000) * [(€ 80,000 - taxable income) / (€ 80,000 - € 8,059)]]</sub>

PIT benefits

Non-habitual residents

Taxation

Employment and self-employment income, derived from “high value-added activities of a scientific, artistic or technical nature” (included in a list of activities published by the Portuguese Government), received by non-habitual residents in Portugal is subject to a special tax rate of 20%.

Additionally, the regime also establishes a tax exemption for foreign-sourced income, such as employment income, self-employment income, rental income, interest, dividends as well as other investment income, under specific conditions.

Foreign source pensions (and similar income) are subject to a fixed rate of 10%.

The regime is applicable for a period of ten consecutive years.

Conditions

The regime applies to individuals who become Portuguese tax residents, under Portuguese domestic law, in a specific year and have not qualified as tax residents in Portugal in any of the previous five years.

_{Note: The Non-Habitual Residents (RNH) regime was revoked with effectiveness to 1 January 2024 onward. However, the regime is still applicable to those who (i) ware already registered as RNH on 1 January 1, 2024 or (ii) that by 31 December 31, 2023, meet the conditions for registration as RNH.  The regime is also applicable to individuals who become tax residents until 31 December 2024 provided certain conditions are met.}

Specificities

The status of non-habitual tax resident becomes effective upon registration with the Portuguese tax authorities. Application should be filed until the 31st March of the year following that which the taxpayer becomes tax resident in Portugal.

For taxpayers who have become residents in 2024 but who have not registered under the regime, the application of the regime may still be considered.

Tax Incentive Scheme for Scientific Research and Innovation (IFICI)

Taxation

The regime shall provide for: 

• A special 20% rate on net employment income (category A) and business and professional income (category B) from the activities identified in the applicable legislation. 
• As a rule, an exemption on foreign sourced employment income, business and professional income, investment income, rental income and capital gains.

Conditions

The regime applies to individuals who:

(i) become Portuguese tax residents, under Portuguese domestic law, in a specific year;
(ii) have not qualified as tax residents in Portugal in any of the previous five years;
(iii) do not benefit or have benefited from the RNH regime or the former resident regime;
and
(iv) who carry out activities provided for in the applicable legislation.
 

Tax regime for former tax residents

Taxation

50% relief from taxation on employment and self employment/business income.

For those who become tax residents from 1 January 2024 onward, the relief is capped at € 250,000.

Conditions

The regime applies to taxpayers that became or become resident in the Portuguese territory from the years  2019 to 2026 provided that:

• they were not resident in the Portuguese territory in any of the 5 prior years;
• have been resident in the Portuguese territory at any time before the referred five year period;
• have their tax situation regularized.

The regime applies for 5 years, including the year of return.
 

Youth Personal Income Tax (“IRS Jovem”)

Income from Category A (employment income) and Category B (self employment/business income) earned by taxpayers who are up to 35 years old who are not dependents, is partially exempt from PIT, in the first ten years earning employment or self-employment income.

The exemption applicable corresponds to 100% of the income earned in the first year, 75% in the second, third and fourth years, 50% in the fifth, sixth and seventh years and 25% in the eighth, ninth and tenth years, capped at 55 x Social Support Index (IAS).

A transitional regime has been created which establishes that, for purposes of exemption, taxpayers are included in the percentage corresponding to the year following the number of income generation from categories A and B already elapsed, not considering, for this purpose, the years in which they were considered dependents.

The exemption does not apply in the years in which income from categories A and B is not earned, resuming its application for the remaining years income is obtained by the taxpayer, until a total of ten years of exemption or the age limit of 35 years is reached.
 

Share plans or equivalent rights

Gains derived from share plans or equivalent rights created by the employer for the benefit of the employees may be taxed at only 50% of their value at the rate of 28%, provided certain conditions are met.
 

Intellectual property

Author rights obtained by a Portuguese tax resident who is the respective original owner, benefit from a 50% tax relief. However, the amount excluded from taxation is capped at € 10,000.
 

Venture capital funds

Capital gains derived from the sale of participation units are taxed at a 10% rate.
 

Collective investment vehicles in forest resources

Capital gains derived from the sale of participation units in real estate investment funds, or shares in real estate investment companies in forest resources, are taxed at a 10% rate.
 

Capital gains realized by non residents

An tax exemption applies to the disposal of:

• shares, other securities and autonomous warrants issued by Portuguese tax resident companies;
• derivatives negotiated at a regulated stock exchange;
• participation units in venture capital funds.
   

Exceptions:

• residents in countries, territories and regions that provide a favorable tax regime under Portuguese tax law;
• disposal of shares in companies whose assets comprise more than 50% of real estate located in Portugal.

Employer contributions to social security regimes

Employers' contributions to pension funds (or other complementary social security regimes) are PIT exempt at the moment of the contribution, provided certain requirements are met.
 

Sportsmen

• Prizes and awards granted to disabled athletes, high performance athletes and their coaches are tax exempt, as long as granted by one of the entities referred to in the legislation.

• Sports training grants awarded to non-professional sports agents (players, referees, judges) are tax exempt, up to € 2,375, provided that certain conditions are met.

• Compensations paid to non-professional referees and umpires are excluded from taxation, up to € 2,375, provided that certain conditions are met.
   

“Programa Semente” / Start-ups

This tax benefit is applicable to individuals making eligible investment under “Programa Semente”, allowing a PIT credit of 25% of the eligible investment. This investment is limited to shareholdings not exceeding 30% of the share capital or of the voting rights. It should be represented by cash contributions actually paid, and, among other requirements, the annual amount of the eligible investment cannot exceed € 100,000.00 per taxable person.

_{The contents presented are of a general and purely informative nature, not intended for any particular entity or situation, and do not replace obtaining appropriate professional advice for specific cases. PwC makes every effort to keep the 2026 Tax Guide updated; however, it cannot guarantee its up-to-date status at all times.}
 

^{© 2026 PwC. This communication is of an informative nature and intended for general purposes only. It does not address any particular person or entity nor does it relate to any specific situation or circumstance. PricewaterhouseCoopers Tax Services TLS, Lda. We will not accept any responsibility arising from reliance on information hereby transmitted, which is not intended to be a substitute for specific professional business advice.}