In 2024, Portugal’s tax system includes progressive rates for residents, a flat rate for non-residents, and additional taxes on high earners. Here’s a breakdown to help residents and non-residents navigate their tax responsibilities effectively.
Taxation of Residents
Residents in Portugal are taxed on their worldwide income at progressive rates from 13.25% to 48%, depending on income level. Here’s a look at the progressive tax bands for 2024:
- Income up to €7,703: 13.25%
- €7,703 to €11,623: 18% (with a €365.89 deduction)
- €11,623 to €16,472: 23% (with a €947.04 deduction)
- €16,472 to €21,321: 26% (with a €1,441.14 deduction)
- €21,321 to €27,146: 32.75% (with a €2,880.47 deduction)
- €27,146 to €39,791: 37% (with a €4,034.17 deduction)
- €39,791 to €51,997: 43.5% (with a €6,620.43 deduction)
- €51,997 to €81,199: 45% (with a €7,400.21 deduction)
- Above €81,199: 48% (with a €9,836.45 deduction)
For married couples or de facto unions, the taxable income may be divided by two if they choose joint taxation, which can reduce the effective tax rate.
Non-Resident Taxation
Non-residents in Portugal are only taxed on Portuguese-source income. In 2024, a flat rate of 25% applies to most types of taxable remuneration for non-residents, including employment, self-employment, and pension income. This rate applies to income derived from activities performed in Portugal or paid by a Portuguese entity.
Capital Gains and Investment Income
Portugal has special rates for capital gains and certain types of investment income. Non-residents and residents alike should be aware of these specific rates to optimize tax efficiency.
Solidarity Tax for High Earners
Portugal also imposes an additional solidarity tax for high earners. In 2024, a rate of 2.5% applies to those with taxable income above €80,000, while a 5% rate applies to income above €250,000.
This system, with its progressive and flat rates, allows both residents and non-residents to understand their tax obligations. Careful consideration of these rates and available deductions can support tax planning, helping individuals meet compliance requirements and manage tax liabilities effectively.
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