If you are a tax resident in Portugal, you can decrease the IRS (Personal Income Tax) you pay or increase the refund you receive.
You can reduce the tax you pay or increase the refund you receive if you validate the invoices issued in 2023, with your Portuguese tax number associated, until February 26th, 2024 on «Portal das Finanças | E-fatura».
Effectively, when the Portuguese Tax Authority has queries about the category of a given expense, the invoice remains pending until you indicate to which category the invoice should be inserted in.
Thus, you have until February 26th, 2024 to associate each expense with the respective category in order to benefit from deductions in health, education, housing, nursing homes, accommodation and restaurants, car and motorbike repairs, hairdressers and beauty salons, gyms, vets, newspapers and magazines, monthly passes for public transportation, as well as general family expenses.
The outstanding invoices will not count for deduction purposes in IRS.
Regarding the expenses that qualify for the deduction in IRS, there are the following:
- 35% of general family expenses (supermarket, clothing, electricity, petrol, etc.) incurred by any member of the household, with a limit of € 250,00 per taxpayer. In single-parent families, the percentage is 45%, with an overall limit of € 335,00.
- 15% of health expenses incurred by any member of the household, with an overall limit of € 1.000,00.
- 30% of education expenses incurred by any member of the household, with an overall limit of € 800,00.
- 15% of the rent paid by any member of the household for the main residence, with an overall limit of € 502,00, with the possibility of an increase of the limit in specific cases.
- 25% of the cost of nursing homes, with an overall limit of € 403,75.
- 20% of the amount paid and not reimbursed for children’ pensions, provided it has been ordered by court judgement or court-approved agreement.
- 15% of the VAT paid by any member of the household in the following sectors: car and motorbike repair, accommodation and restaurants, hairdressing and beauty salons and veterinary activities, with an overall limit of € 250,00 per household.
- 100% of the VAT paid in the purchase of monthly tickets to use public transport.
- 100% of the VAT paid in the purchase of newspapers and magazines.