Portugal – Changes in tax for 2024
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Personal Income tax (PIT) for youth
The exemption on tax for young people has been increased in 2024.
- 100% exemption in the first year, with a limit of 40 times the value of the IAS
- 75% in the second year, with a limit of 30 times the value of the IAS
- 50% in the third and fourth years, with a limit of 20 times the value of the IAS
- 25% in the fifth year, with a limit of 10 times the value of the IAS
IAS for 2024 is valued at EUR 509.26.
End of NHR tax regime
The tax regime for non-habitual residents is repealed. However, for the taxpayers who are already registered as non-habitual residents, the special regime will continue to apply until the end of the ten-year period foreseen under the regime.
As on 31st Dec 2023, the persons who meet the conditions for registration as non-habitual residents or are in possession of a valid residence visa on that date, are required to register by 31 March 2024 to be covered under special tax regime.
Changes for “Ex-residentes”
Former resident’s regime shall apply to taxpayers that become residents in the years 2024 to 2026, if they were not resident in the Portuguese territory in one of the previous five years. The relief is 50% from taxation. It is capped at EUR 250,000 and applies for five years.
In addition, previous tax residence of the taxpayer in the Portuguese territory is no longer required as it currently does.
Exemption on profit share income
The amounts paid as participation in company profits, by way of bonus, is exempt up to five time the value of RMMG (EUR 820). The employer must have increased the average nominal fixed remuneration of employees by 5% or more. This income shall be aggregated with other income for determining the tax rate.
Exemption on per diem for travel
Per Diem and compensation for travelling in own vehicle rates have been updated as follows
| Particulars (EUR) | Workers (EUR) | Members of government and equivalent (EUR) |
|---|---|---|
| Per diem | 0.36 | 0.40 |
| Domestic trip | 62.75 | 69.19 |
| Abroad trip | 148.91 | 167.07 |
Tax & social security exemption on housing benefit
The income in kind resulting from the use of a permanent house provided by the employer, for the period between 1 January 2024 and 31 December 2026 are exempt from tax and social security contributions.
This exemption does not apply if an employee holds a shareholding of no less than 10 per cent of the share capital or the voting rights of the employer.
Tax rate for 2024
Withholding tax tables for “A” category has been revised. It has table “I” to “VII”.
Table I: Not married without dependents or married with two dependents.
| Monthly Remuneration (EUR) | Tax Rate (%) | Abatement (EUR) | Dependent Relief (EUR) |
|---|---|---|---|
| 0 – 820 | 0 | 0.00 | 0.00 |
| 821 – 935 | 13.25 | 13.30% * 2.6 * (1,135.39 – R) | 21.43 |
| 936 – 1001 | 18.00 | 18.00% * 1.4 * (1,358.20 – R) | 21.43 |
| 1002 – 1123 | 18.00 | 96.82 | 21.43 |
| 1124 – 1765 | 26.00 | 186.66 | 21.43 |
| 1766 – 2057 | 32.75 | 305.80 | 21.43 |
| 2068 – 2664 | 37.00 | 393.23 | 21.43 |
| 2665 – 3193 | 38.72 | 439.05 | 21.43 |
| 3194 – 4173 | 40.05 | 481.52 | 21.43 |
| 4147 – 5470 | 41.00 | 521.17 | 21.43 |
| 5471 – 6540 | 42.70 | 614.16 | 21.43 |
| 6541 – 20 067 | 44.95 | 761.31 | 21.43 |
| Above 20 067 | 47.17 | 1 206.80 | 21.43 |
Further details & other amended tables for 2024 can be found on the Tributary and Customs Authority website.
Please contact your Mercans’ services delivery team for any additional information regarding the implications of the above change
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