Simplified Regime vs. Organized Accounting in Portugal

If you’re starting your activity or planning to grow your business, understanding the differences between the Simplified Regime and Organized Accounting (Contabilidade Organizada) is essential.

What Is the Simplified Regime and Organized Accounting?

The Simplified Regime is the default system assigned by the Portuguese Tax Authority for most freelancers when they open an activity.

Key Characteristics of Simplified Regime and Organized Accounting:

• Automatically assigned upon registration

• Taxation by coefficients, not based on actual expenses

• No certified accountant required

• Ideal for small structures with low expenses

Under this regime, the tax office assumes what percentage of your income is considered profit and applies tax based on that coefficient. This means your real expenses usually don’t matter, except for a few allowed categories (such as 15% of certain expenses).

Who is it best for?

• Freelancers with low business expenses

• Those looking for maximum simplicity

• Early-stage professionals with small or stable turnover

What Is Organized Accounting (Contabilidade Organizada)?

The Organized Accounting regime gives you full access to expense deductions and more detailed financial control.

Key Characteristics:

• Mandatory when your turnover exceeds €200,000 per year

• Taxable income = Revenue – Actual Deductible Expenses

• Allows deduction of a wide range of costs:

  
  

  • rent

  • home office costs

  • vehicles

  • professional equipment

  • software and subscriptions

  • travel expenses

• Requires a certified accountant (Contabilista Certificado)

• Better for businesses with medium to high costs or growing quickly

Who is it best for?

• Freelancers with substantial expenses

• Entrepreneurs expecting to scale their business

• Professionals who want maximum tax optimization

How to Decide Between the Two Regimes

To choose correctly, start by answering these 3 essential questions:

What percentage of my income are my expenses?

If your annual expenses are significant (equipment, rent, software, subcontracting, transportation), Organized Accounting is usually more beneficial.

Is my business growing, and could I exceed €200,000 soon?

If yes, it’s wise to consider Organized Accounting early so your tax strategy matches your long-term growth

Do I prefer a simpler regime, or do I want full tax optimization?

• Prefer simplicity → Simplified Regime

• Prefer lower taxes through deductions → Organized Accounting

INLIS Consulting Recommendation

Before making your decision, you should:

Simulate both scenarios

A proper simulation can show differences of thousands of euros per year.

Consider your growth plans

Your tax strategy should support—not limit—your business.

Talk to a specialist

Choosing the wrong regime can lead to unnecessary tax burdens, penalties, or missed deductions.

Need Help? We’re Here for You.

At INLIS CONSULTING, we help freelancers, entrepreneurs, and international professionals choose the most suitable tax regime in Portugal, with:

• clear guidance

• predictable tax planning

• no surprises at the end of the year

📞 Contact us today to receive a personalized assessment for your activity.