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Tax system in Portugal

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Foreigners moving to Portugal will probably have to pay different types of taxes, including income tax. Find all related information in this article.

Portugal is far from being a tax haven. If you are moving there, you will probably have to pay different types of taxes just like Portuguese nationals. Hence, you are advised to inquire on taxation before settling there in order to avoid surprises.

Obtain your tax code

First of all, you will have to obtain your tax identification code (NIF or numero de contribuinte) once you are in Portugal. This code will be required for various formalities in the country, for instance, opening a bank account, applying for internet and telephone services, etc. To apply for the tax identification code, visit any Lojas do Cidadão or local tax administrative center. You might as well apply online. Fees of some 6,40 euros apply.

Documents to be produced are:

  • a passport or identity card and proof of residence from your home country if you are a European Union citizen
  • a valid passport and a fiscal guarantor (local or foreign) in the case of a non-European citizen.

You will be subject to tax once you have obtained your tax identification number.

Income tax

All active Portuguese residents have to pay income tax. Hence, you will be considered as a Portuguese resident if you have stayed for more than 183 days in the country. You are advised to verify, beforehand, if your home country has any non-double taxation agreement with Portugal.

If you have been hired by a Portuguese firm, your income tax will be deducted at source. This sum will be directly debited to the tax department. However, you are required to fill an annual tax return and pay arrears if any.

Moreover, a few exceptions apply to single, separated and divorced foreigners. They are advised to seek related information in due time with the tax department.

As regards European Union retired public officers, they will not have to pay tax in Portugal. On the contrary, tax will be deducted at source from their retirement pension in their home country.

In case you receive collection notices, you are advised to hire a tax consultant. However, their services may be quite expensive.

Wealth tax

Wealth tax does not apply in Portugal as in many other European countries.

Local taxes

Foreigners, like Portuguese nationals, have to pay a municipal tax amounting to 0,8% for urban and rural housing and 1% for mixed buildings.

Donation and succession taxes

You will have to pay donation and succession taxes if you donate or inherit a real estate property. The tax rate is calculated according to the property's value.

Stamp duty

Stamp duty is deducted on the publication of some particular documents, books, legal acts, for instance. Fees that apply vary.

 Useful links:

Portal das Finanças – Ministry of Finance www.portaldasfinancas.gov.pt
Ministry of Finance - Portuguese tax system info.portaldasfinancas.gov.pt
Income tax info.portaldasfinancas.gov.pt/pt/apoio_contribuinte
NIF www.nif.pt

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