Portuguese Proposed Tax Reforms

25.07.14

Please note that this article is over six months old. While Blevins Franks takes care to make sure that information is accurate on the date of publication, some content may change over time. You should not rely on the accuracy of legislation and tax information in this article; take professional advice for your circumstances.

The Portuguese government has released its proposed tax reforms. They are open to public consultation, after which it is presumed they will be incorporated into the 2015 budget.

The Portuguese government has released the results of a commission which was formed in order to review and propose reforms to the Portuguese tax system.

The commission’s proposals, presented by the Finance Minister, supports the Government’s aim to begin gradually lifting the fiscal burden on households from both a financial and an administrative perspective.

The reform proposals centred around personal tax include the following:

  • An option for spouses to be taxed separately instead of as a household.
  • Reduction of tax on savings where held for more than 5 years.
  • The introduction of a simplified tax return which would mean that the tax authorities would pre-populate the tax return for up to 1.7 million taxpayers.
  • Inclusion of unemployed individuals, up to the age of 25, who live with their parents within the term ‘dependant’ for tax purposes.
  • An increase to the exempt income tax threshold, which excludes households from having to submit an income tax declaration, from €4,104 to €8,145 along with a commitment from the tax office to issue such households with a certificate which can be presented to the social security office in order to secure appropriate benefits.
  • An increase in the travel expenses that can be claimed for those working over 100 kilometres from their home.
  • Tax breaks of between 50% and 25% for the newly self-employed for the first two years as well as simplified compliance obligations.
  • A measure to create higher tax savings for families with children by increasing the weighting given per child for couples with children by 0.3% per child.
  • Tax exemptions to apply to pensions received by widow/ers of soldiers killed whilst in service.

The draft reform proposals are open to public consultation until 20th September 2014 after which it is presumed they will be incorporated into Budget 2015.

23 July 2014

Tax rates, scope and reliefs may change. Any statements concerning taxation are based upon our understanding of current taxation laws and practices which are subject to change. Tax information has been summarised; an individual is advised to seek personalised advice.

Tax rates, scope and reliefs may change. Any statements concerning taxation are based upon our understanding of current taxation laws and practices which are subject to change. Tax information has been summarised; individuals should seek personalised advice.

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