All tax information in this section is summarized by KPMG & Associados – SROC, SA based on the Portuguese Personal Income Tax Code, enacted in 1989, updated as of 31 December 2014, according to the Portuguese Personal Income Tax Reform.
Are there social security/social insurance taxes in Portugal? If so, what are the rates for employers and employees?
Employer and employee
|Type of insurance||Employer Percent||Employee Percent||Total|
* Portuguese residents and non-resident employees in Portugal are liable to social security contributions at a rate of 11 percent on their gross remuneration or 9.3 percent if members of the board or directors of a company. Employers are liable to social security contributions at a rate of 23.75 percent on the same gross remuneration or 20.3 percent for members of the board. However, for members of the board who are “Administradores” and “Gerentes” the social security contributions are at a 11 percent rate for the employee and 23.75 percent for the employer.
Some items may not assessable to social security contributions such as the following:
There are three main types of exceptions to the payment of social security contributions in Portugal: those derived from the EU Rules 1408/71 and 2001/83 (EU residents and residents in third countries where these regulations are applicable), those derived from Portugal’s social security treaties and those derived from internal rules in international assignments. In general terms, foreign employees assigned to work in Portugal for an estimated period of less than one year will continue to pay social security contributions in their home country. Under these special assignment rules, the period of exemption of Portuguese contributions may be extended for a further year. Should authorities of the two countries enter into an agreement the exemption can be granted initially for a longer period, but normally up to a maximum of five years. Some exemptions are also available for individuals working in more than one country.
The Portuguese authorities have started to accept exemption in cases other than the two above referred. The exemption process is analyzed on a case-by-case basis.
According to the real estate taxation reform, gift and inheritance tax has been revoked since 1 January 2004. As a result, all actual and effective transfer of assets, located in the Portuguese territory, to individuals, will be liable to stamp tax at a 10 percent flat tax rate. However, gifts (during lifetime or upon death) to the donor’s spouse, descendants and ascendants are tax-exempt.
Yes. Municipal property tax is levied on the patrimonial value of urban and non-urban property located in Portuguese territory and it is assessed annually considering the property's patrimonial taxable value. This tax is assessed on the value of the property, as determined for tax purposes. The tax rates are 0.8 percent for rural property and range from 0.3 percent to 0.5 percent for urban property.
Yes, value-added tax applies on the following:
There are three different VAT rates are as follows:
Are there additional taxes in Portugal that may be relevant to the general assignee? For example, customs tax, excise tax, stamp tax, and so on.
According to the real estate taxation reform, gift and inheritance tax has been revoked since 1 January 2004. As a result, all actual and effective transfer of assets, located in the Portuguese territory, to individuals, will be liable to stamp tax at a 10 percent flat tax rate.
There are no local taxes imposed on the income of individuals. There is, however, a local tax on immovable property as referred to above (Real estate tax).
Property transfer tax
A property transfer tax (IMT) is assessed on onerous transfer of ownership rights, or limited rights, in real estate located in Portuguese territory, as well as on legal actions economically comparable to these transmissions.
IMT is due, namely, in the following situations:
IMT is levied on the value of the act or of the contract or on the patrimonial value of the assets, whichever the highest.
The IMT rates are as follows.
|Urban property for permanent dwelling purposes1 (EUR)||Rates|
|From 92,407 to 126,403||2%||0.5379%|
|From 126,403 to 172,348||5%||1.7274%|
|From 172,348 to 287,213||7%||3.8361%|
|From 287,213 to 574,323||8%||-|
Single rate of 6%
|Acquisition of secondary habitation (EUR)||
|From 92,407 to 126,403||2%||1.2689%|
|From 126,403 to 172,348||5%||2.2636%|
|From 172,348 to 287,213||7%||4.1578%|
|From 287,213 to 550,836||8%||0.0000%|
Single rate of 6%
|Acquisition of other property||Rates|
|Urban property not exclusively for residential purposes and other onerous acquisitions||6.5%|
|Urban and non-urban property purchased by a tax haven resident entity.||10.0%|
1In Madeira and Azores the limits are multiplied by 1.25.
2Exemptions conditioned to the prior submittal of a request thereof to the tax authorities and prior consent of the respective Municipality.