In this blog, we’ll break down the main taxes in Portugal and their application, providing a comprehensive guide to help you navigate the tax landscape.
Here is a detailed table format of the main taxes in Portugal:
Tax Type | Description | Rate/Details |
1. Income Taxes (IRS) | Tax on the income of individuals, both residents and non-residents. | Progressive rates from 14.5% to 48%, based on income levels. |
2. Corporate Income Tax (IRC) | Tax on the profits of companies operating in Portugal. | Standard rate: 21%. Reduced rates for small businesses with profits under €200,000: 17%. |
3. Value Added Tax (VAT) | Tax on the sale of goods and services. | Standard rate: 23%, Reduced rates: 13% and 6% for specific products/services. |
4. Social Security Contributions | Contributions to the Portuguese social security system (for employees, employers, and self-employed). | Employee: 11%, Employer: 23.75%, Self-employed: 21.4%. |
5. Municipal Property Tax (IMI) | Tax on the ownership of real estate properties. | Rates range from 0.3% to 0.8% based on property value and location. |
6. Stamp Duty (Imposto do Selo) | Tax on legal documents, financial transactions, and property transfers. | Property transfers: 0.8%, Varies by transaction (e.g., loans, financial instruments). |
7. Inheritance and Gift Tax (IS) | Tax on the transfer of assets through inheritance or gifts. | Exempt for direct family members; for others, rates range from 10% to 20%. |
8. Capital Gains Tax | Tax on profits from the sale of assets like property or stocks. | 50% of the gain is taxable for residents. 28% for non-residents on property sales. |
9. Property Transfer Tax (IMT) | Tax on the transfer of property, applicable during the sale of real estate. | Rates range from 1% to 8%, based on property value. |
10. Vehicle Tax (IUC) | Tax on vehicle ownership in Portugal. | Annual tax depending on vehicle type, age, and emissions. |
11. Tourism Tax | Tax on tourists staying at accommodations in certain municipalities. | Typically €1 to €2 per night, depending on the location. |
12. Excise Taxes | Taxes on specific goods like alcohol, tobacco, and fuel. | Varies by product, e.g., tobacco: around €2.55 per pack, fuel taxes included in price per liter. |
13. Corporate Contributions (Derrama) | Additional municipal tax on the profits of companies. | Up to 1.5% of taxable profit, depending on the municipality. |
Conclusion: Navigating Taxes in Portugal
Portugal’s tax system can be complex, but understanding the key taxes that apply to individuals and businesses can help ensure that you remain compliant and avoid any unexpected costs. Whether you're a resident, non-resident, or entrepreneur, it's important to stay informed about the tax landscape in Portugal.
By knowing what to expect and how to plan, you can make the most of your time in Portugal and ensure that your financial obligations are met efficiently.
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