About Taxbordr: founder-led IRS Portugal advisory
Taxbordr is a Portugal tax advisory firm founded by Telmo Ramos, Ordem dos Economistas Cédula nº 16379, formerly KPMG Luxembourg and EY Lisbon. Every IRS Portugal filing engagement is owned by Telmo personally. This guide is informational and explains the 2025 income year mechanics. For paid filing support with a signed Position Memo and Modelo 3 submission, see the IRS Portugal 2025 service.
Brackets and rates for the 2025 income year
The 2025 IRS brackets, applicable to income earned in 2025 and filed by 30 June 2026, were set under Lei 82/2023 (OE 2024) and adjusted by Lei 73-A/2025 (OE 2026): - Up to €8,059: 13.25 percent - €8,059 to €12,160: 18 percent - €12,160 to €17,233: 23 percent - €17,233 to €22,306: 26 percent - €22,306 to €28,400: 32.75 percent - €28,400 to €41,629: 37 percent - €41,629 to €44,987: 43.5 percent - €44,987 to €83,696: 45 percent - Above €83,696: 48 percent The 2026 adjustments under Lei 73-A/2025 raise the first-bracket threshold to €8,342 with a 12.5 percent rate, applicable to 2026 income filed in 2027. Solidarity surcharge under CIRS art 68-A applies at 2.5 percent between €80,000 and €250,000 and 5 percent above €250,000.
Regime stack: standard, IFICI, NHR transitional
Three regime paths apply to 2025-income filings. Standard regime: progressive brackets above. IFICI under EBF art 58-A: 20 percent flat on qualifying Cat A and Cat B Portuguese-source income, with foreign-source Cat A/B/E/F/G exemption (CIRS art 81 n.º 4). NHR transitional under Lei 82/2023 art 236: existing 10-year registrations continue at the original 20 percent on qualifying Portuguese-source activity plus pension treatments at the historical rates (0 percent pre-2020 vintage, 10 percent for 2020-and-later registrants). New NHR is closed since 1 January 2024; the late-application window closed on 31 March 2025 with extensions under Despacho 24/2025-XXIV. Regime is declared on Anexo L.
Modelo 3 anexo guide for 2025-income filings
Anexo A (Cat A employment): Portuguese employment income, including IFICI 20 percent rate-applied amounts.
Anexo B (Cat B simplified): Self-employment under simplified regime; presumed-deduction percentages by activity type.
Anexo C (Cat B organised accounting): Self-employment with full bookkeeping.
Anexo D (transparency / partnership): Less common; for transparent entities.
Anexo E (Cat E capital income): Portuguese-source dividends and interest, 28 percent autonomous (CIRS art 71/72) or optional aggregation.
Anexo F (Cat F rental): Portuguese rental, 28 percent flat or aggregation; 5-15 percent reductions for longer-term lease per CIRS art 72.
Anexo G / G1 (Cat G capital gains): Real estate gains (50 percent inclusion at progressive rates per CIRS art 43.2), securities (28 percent flat with post-2024 graduated relief).
Anexo H (deductions and credits): Family allowances, education, health, residential leases (limits set in OE 2026).
Anexo I (heritage exemption): Special inheritance-related items.
Anexo J (foreign-source income): Foreign income reporting with treaty articles, foreign-tax credits under CIRS art 81.
Anexo L (NHR / IFICI regime election): Annual regime election form.
Anexo J: foreign income mechanics
Anexo J reports foreign-source income with treaty allocation. Foreign dividends are reported gross with foreign-tax credit on the underlying withholding (capped at the Portuguese effective rate per CIRS art 81 n.º 1). Foreign interest is similarly reported with credit. Foreign rental income is reported under Cat F mechanics. Foreign pensions are Cat H, reported on Anexo J. IFICI residents claim the foreign-source exemption on Anexo L plus the supporting Anexo J line. Englobamento (aggregation) can be elected at the Anexo level for capital income, with the resulting income aggregated to the standard brackets.
Pre-submission checklist
Confirm residency status under CIRS art 16 for the calendar year.
Confirm regime: standard, IFICI active, or NHR transitional.
Aggregate Cat A payroll certificates (income certificate + retention certificate).
Aggregate Cat B invoices and Cat B presumed-deduction calculations.
Aggregate foreign brokerage year-end statements with EUR-rate workings.
Aggregate Portuguese rental contracts and Anexo F supporting documents.
Aggregate IMI references for any rental or AIMI workings.
Identify treaty articles applicable to each foreign-source line.
Confirm Anexo J credit calculations against home-country withholding statements.
Common 2025-income filing pitfalls
First, mismatched residency dates between Portugal and home country. Second, missing the IFICI election deadline (15 January 2026 for AT-system application; declared on Anexo L by 30 June 2026). Third, treating UK State Pension as withheld at source (HMRC pays gross). Fourth, filing US Social Security without an Article 20 and credit-mechanics note. Fifth, conflating CIRS art 16 (residency) with CIRS art 81 (relief from international double taxation).
What this guide is not
This guide is informational, not advice on your specific situation. For paid filing support with a signed Position Memo and Modelo 3 submission, see the IRS Portugal 2025 service. Individual facts govern; speak with a qualified professional before acting.
Frequently Asked Questions
What is Modelo 3?
Modelo 3 is the Portuguese personal income tax return (IRS) filed annually for the prior calendar year's income. It comprises the main form plus relevant Anexos (A, B, C, D, E, F, G, G1, H, I, J, L) for different income types and regime elections.
When is the Portugal IRS 2025 deadline?
30 June 2026 for income earned during the 2025 calendar year, with the filing window opening 1 April 2026. Late filings are accepted with coima reductions under RGIT art 30 if payment accompanies the submission.
What changed for 2025 income brackets versus 2024?
The 2025 brackets adopted under Lei 73-A/2025 carry forward the 9-bracket structure with the first-bracket rate at 13.25 percent up to €8,059. The 2026 income year (filed 2027) lifts the first bracket to 12.5 percent / €8,342 under the same law.
Is IFICI declared on the same form as NHR transitional?
Both are declared on Anexo L. IFICI is a separate regime under EBF art 58-A. NHR transitional under Lei 82/2023 art 236 applies to pre-2024 registrants and to late applicants accepted under the 31 March 2025 cutoff.
How does Anexo J work for foreign dividends?
Foreign dividends are reported gross. The foreign withholding credit is allowed up to the Portuguese effective rate on the same income under CIRS art 81 n.º 1. Englobamento can be elected to aggregate Cat E income to the standard brackets. IFICI residents may elect the exemption method under CIRS art 81 n.º 4 instead of the credit method.
What is the solidarity surcharge?
A surcharge under CIRS art 68-A levied on top of the standard CIRS at 2.5 percent on income between €80,000 and €250,000 and 5 percent above €250,000.