Portugal uses a progressive income tax system called IRS (Imposto sobre o Rendimento das pessoas Singulares) with 9 brackets ranging from 12.5% to 48% for 2026 (updated from 2025 following 3.5% threshold indexation and rate reductions on lower brackets). For expats, the IFICI regime (often called NHR 2.0) offers a 20% flat rate on qualifying Portuguese income plus exemptions on foreign income for 10 years. Non-residents pay a flat 25% on Portuguese-sourced income. Use our calculator to estimate your Portuguese tax liability under the standard IRS system.
Note: These are marginal rates — you only pay the higher rate on income within each bracket.
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Portugal has 9 progressive income tax brackets for 2026, ranging from 12.5% on income up to €8,342 to 48% on income over €86,634. The 2026 rates were updated from 2025 with a 3.5% indexation of thresholds and small rate reductions on lower brackets. Non-residents pay a flat 25% on Portuguese-sourced income. A 2.5% solidarity surcharge applies on income above €80,000.
The IFICI regime (Tax Incentive for Scientific Research and Innovation), also called NHR 2.0, replaced the original NHR program in 2024. It offers a 20% flat tax rate on qualifying Portuguese income and exemptions on most foreign-sourced income for 10 years. Eligibility requires not being a Portuguese tax resident in the previous 5 years and having specific qualifications (Bachelor's + 3 years experience or PhD).
The Portuguese IRS tax return deadline is April 1 to June 30, 2026 for the 2025 tax year. Tax residents must declare worldwide income, while non-residents only declare Portuguese-sourced income. Returns are filed through the Portal das Finanças.
No, the original Non-Habitual Resident (NHR) regime ended for new applications on March 31, 2025. Existing NHR holders can continue for their full 10-year period. New arrivals should explore the IFICI regime (NHR 2.0) which has different eligibility criteria focused on scientific research and innovation roles.
US citizens in Portugal face unique challenges as they must file US taxes on worldwide income. The US-Portugal tax treaty helps avoid double taxation through foreign tax credits. Under IFICI (NHR 2.0), US pension income may be taxed at 10% in Portugal. American expats should consult a cross-border tax specialist.
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Last Updated: October 2026