Tax system in Portugal
Portugal is not a low-tax country in the Gulf sense, but it is a structured EU tax system with clear rules. Residents are taxed on worldwide income, non-residents are taxed on Portuguese-source income, and the 2026 personal income tax table runs from 12.5% to 48%, with an additional solidarity rate for the highest incomes.
For companies, the key 2026 headline is the 19% mainland corporate income tax rate, with lower rates in Madeira and the Azores and separate municipal and state surtaxes for larger profits. Portugal also has a 15% SME rate on the first EUR 50,000 in mainland Portugal.
Portugal does not levy a general net wealth tax or inheritance tax, but it does levy IMI property tax, AIMI on higher-value residential property, and stamp duty on most gratuitous transfers outside the direct family exemption. VAT, payroll social security and withholding taxes also matter in day-to-day planning.
Tax rates at a glance
- Income tax
- 12.5% - 48%Progressive
- Wealth tax
- 0% (AIMI on property)
- Inheritance tax
- 0% (stamp duty applies instead)
- Capital gains tax
- 28%
- Corporate tax
- 19%
- Dividend tax
- 28%
- VAT
- 23%
Who benefits most
These profiles tend to benefit most when the rules match their real residence, payroll and business setup.
ExpatsFoundersInvestorsRemote workersHolding companies
Watch out for
- { "Portugal is not tax-free": "personal tax, corporate tax, VAT, social security, IMI, AIMI and stamp duty can all apply depending on the asset or activity." }
- The corporate tax rate is already set to fall from 20% to 19% for 2026, then to 18% in 2027 and 17% in 2028, subject to the enacted schedule.
- New applicants can no longer rely on the old NHR regime; the current planning conversation is usually IFICI, transitional reliefs, residence status and foreign-source income rules.
- { "Social security and payroll costs are material": "employees generally pay 11% and employers 23.75%." }
- A VAT group regime is scheduled to start on 1 July 2026, which matters for groups with multiple Portuguese entities.
Frequently asked questions
Is Portugal a low-tax country?
Not generally. Portugal has a competitive EU system in some cases, but the default rules include progressive income tax up to 48%, 19% corporate tax on the mainland, 28% dividend and investment income rates, VAT and social security.
Does Portugal have wealth or inheritance tax?
Portugal has no general net wealth tax and no inheritance tax, but AIMI property tax and stamp duty on gratuitous transfers can still create a real tax bill.
What should expats and founders check first?
Check tax residence, NHR or IFICI eligibility, payroll social security, VAT registration, IMI/AIMI on property, treaty relief and whether your income is salary, dividends, capital gains or business income.