Portugal

Individual - Other taxes

Last reviewed - 31 December 2019

Social security contributions

Social security contributions are shared by the employee and the employer. The contributions are due on the employee’s gross remuneration at rates of 11% and 23.75% by the employee and the employer, respectively. These contributions cover family, pension, and unemployment benefits.

Foreign residents may be exempt from social security in Portugal if they contribute to a compulsory social security system in a European Union (EU) country or a country that has a bilateral social security agreement with Portugal, provided they are in possession of the relevant certificate of coverage.

In addition to social security contributions at a general rate of 23.75%, employers must buy an insurance premium to cover occupational accidents. The premium varies according to work and risk classification.

Regarding members of the board, the social security rates correspond to 9.3% with respect to the individual contributions and 20.3% for employer contributions. However, the contribution rate applicable to members of statutory boards who are considered as managers or administrators is set at rates of 23.75% and 11% to employers and members of statutory boards, respectively. The contributions of members of statutory boards are based on their effective remuneration but subject to a monthly minimum income level of EUR 435.76.

Members of statutory boards who are considered as managers or administrators, and some types of self-employees, become entitled to protection in the event of unemployment.

The basis for contributions due by self-employees is a notional income. The contributions basis will be determined by the social security authorities taking into consideration the average remuneration of the previous year and will be reviewed in October of each year. The contributions will be 29.6% of the referred notional income (for 2018).

A 10% contribution rate is due by employers if 80% or more of the fees earned by the self-employee come from services for the same company, for the same person with a business activity, or to the same group. A 7% contribution rate is due by employers when the economic dependence of the self-employee varies between 50% and 80%. The contribution is payable upon the issue of a tax assessment by the social security authorities.

As of 1 January 2019, the Portuguese monthly minimum wage is EUR 600.

Consumption taxes

Value-added tax (VAT)

There are three VAT rates: the standard rate of 23% (22% in the Autonomous Region of Madeira; 18% in the Autonomous Region of the Azores), the intermediate rate of 13% (12% in Madeira; 9% in the Azores), and the reduced rate of 6% (5% in Madeira; 4% in the Azores). See the Other taxes section in the Corporate tax summary for more information.

Net wealth/worth taxes

There are no net wealth/worth taxes in Portugal.

Inheritance and gift taxes

Donation of property is taxed under the stamp tax at 0.8%.

Free acquisition of goods by individuals (inheritance and gifts) is taxed under the stamp tax at 10%.

Property taxes

Municipal property tax is charged on the registered value of real estate. See the Other taxes section in the Corporate tax summary for more information.