Portugal in 2026: What Are the Tax Advantages and Disadvantages in Portugal?
- Thyani Rodrigues Puppio
- Nov 11
- 3 min read
Portugal 2026: Why the Country Remains Attractive for Remote Workers
Portugal continues to rank among the most sought-after destinations for remote professionals, freelancers, and expatriates who seek quality of life and favorable tax regimes.
Even after the end of the Non-Habitual Resident (NHR) regime, the country has maintained its appeal by creating new incentives focused on innovation and science.
Portuguese Tax System
The personal income tax in Portugal is the Imposto sobre o Rendimento das Pessoas Singulares (IRS). All taxpayers considered tax residents must annually declare all of their income, regardless of origin (principle of universality of income).
According to the 2026 State Budget, the progressive IRS brackets were updated as follows:
Taxable Income (€) — Marginal Rate
Up to €7,820 — 13%
€7,821 to €11,900 — 18%
€11,901 to €16,700 — 23%
€16,701 to €21,500 — 26%
€21,501 to €27,300 — 32.5%
€27,301 to €40,000 — 37%
€40,001 to €52,000 — 43%
€52,001 to €81,200 — 45%
Above €81,200 — 48%
The system is progressive, meaning the higher the income, the higher the applicable rate.
The New Regime: Tax Incentive for Scientific Research and Innovation (IFICI)
Since January 1, 2024, the Non-Habitual Resident (NHR) regime has been replaced by the Incentivo Fiscal à Investigação CientÃfica e à Inovação (IFICI).
The new regime is more restrictive but maintains important benefits for highly qualified workers and professionals in strategic sectors — including technology, scientific research, development, and innovation.
Main features of the IFICI:
Reduced 20% rate on employment income earned in Portugal;
Full exemption on foreign-source income when taxation at source is duly proven or when covered by double-tax treaties;
Duration of 10 years, similar to the former NHR;
Access restricted to professionals in high value-added areas, defined annually by ministerial order.
Taxation of Foreign Income
Portugal adopts the principle of worldwide income declaration for tax residents. This means that all income, whether domestic or foreign, must be declared to the Portuguese tax authority.
However, double taxation treaties (DTTs) signed by Portugal, including the Brazil–Portugal Convention, allow credits or exemptions to avoid double taxation.
Therefore, it is essential that professionals with foreign income — whether salaries, dividends, or passive income — keep complete tax documentation and adopt proper planning.
Tax Benefits in Madeira
The Madeira Free Trade Zone (ZFM) remains a strategic alternative for companies and professionals who wish to set up a structure in Portuguese territory with significant tax benefits.
Companies licensed until 2027 may benefit from a reduced 5% corporate income tax (IRC), provided that job-creation and investment requirements are met.
Madeira also offers advantageous conditions for international service providers, as long as the operation is effectively based in the region.
Dual Tax Residency: A Risk to Avoid
Many professionals who divide their time between countries end up falling into dual tax residency, being required to declare and pay taxes in more than one jurisdiction.
Portugal has automatic information-exchange agreements, which means that banking activity and income are reported to the tax authorities of other countries — including Brazil.
Declaring income only partially may constitute tax evasion, punishable both in Portugal and in the country of origin.
Final Considerations
With the end of the NHR and the creation of the IFCI, Portugal remains competitive for remote professionals and expatriates, especially in the areas of technology and innovation.
However, each case requires personalized tax planning, considering the origin of income, effective tax residency, and the international agreements in force.
If you are interested in hiring professional legal services related to tax consulting for Portugal, contact: contato@trpuppioadvocacia.com.br