Tax Season (IRS) Starts in Portugal

Starting today, Tuesday, April 1st, you can now submit your Income Tax return (IRS) through the online form available on the Finanças portal. Ensure your tax documents are ready for a smooth submission process.

IRS Submission Period:

• The official IRS submission period for the 2025 tax year is from April 1st to June 30th. During this period, taxpayers can submit their IRS returns through the Finanças portal.

Key Benefits for Taxpayers

• Tax Deduction for Domestic Workers:

  • For the first time, taxpayers can benefit from a 5% tax deduction on wages paid to domestic workers, up to a maximum of €200 per family. This deduction applies to those who have employed domestic workers during the tax year.

• Pre-filled Tax Returns:

  • Taxpayers can take advantage of the pre-filled tax returns available via the automatic IRS system, which will include information on common expenses such as health, education, and housing. This feature is designed to simplify the filing process by providing pre-recorded data from the tax authorities.

Who Needs to Submit an IRS Declaration?

1. Exemptions:

   • Individuals with an income less than €8,500 per year or who exclusively receive income subject to withholding tax are exempt from submitting an IRS declaration.

2. Who Still Needs to File:

   • Even if your income is less than €8,500, you are required to submit an IRS declaration if you own private jets, luxury properties, cars, or offshore stocks.

   • Automatic IRS is not applicable to individuals in this category, and therefore, you must file your return.

   
   

How the Automatic IRS Works

• Automatic IRS helps streamline the submission process by automatically filling in tax information for eligible taxpayers. However, if you are included in the automatic IRS system, it is important to review the pre-filled data and confirm or submit the declaration by June 30th.

  
  

  • If you do not confirm or submit your IRS declaration within the given period, the provisional automatic declaration will become definitive at the end of the submission period, and it will be considered as the declaration submitted for legal purposes. This means no further changes or amendments can be made once the deadline has passed.

    
    

• Self-Employed Workers:

  • Self-employed workers who fall under the simplified IRS regime can submit Model 3, a simplified IRS form. However, this only applies to those working under the simplified tax regime and within the list of approved activities under the IRS Code.

Filing IRS for Domestic Workers

• Domestic Workers:

  • If you have employed domestic workers during the tax year, you are now eligible for a new 5% tax deduction on wages paid to them, capped at €200 per family.

  • If you have provided this information to the Tax Authorities, you can now benefit from the deduction in your IRS submission.

How to Submit Your IRS Declaration

1. Using Pre-filled Data:

   • The IRS Model 3 form will be pre-filled with data regarding common expenses such as health, education, rent, and any applicable domestic worker wages.

     
     

   • If the pre-filled data is correct, you can accept it directly. If not, you can manually adjust the data or add missing expenses.

2. Self-Employed Taxpayers:

   • If you are self-employed, and your income is related to services falling under the simplified regime, you will be able to submit your declaration using the simplified IRS process. This makes it easier and faster for those who meet the criteria.

     
     

3. Submitting After the Deadline:

   • If you miss the IRS submission deadline (June 30th), you can still submit your tax return after the deadline, but there will be a minimum fine of €25 for late submission. If the tax authorities notify you before you submit, the fine will be higher.

   • Automatic IRS will become definitive at the end of the deadline, so you must act within the designated period to avoid any penalties.

     
     

Tax Refunds and Refund Period

• The introduction of pre-filled declarations is expected to reduce the IRS refund processing time. According to Cláudia Reis Duarte, the Secretary of State for Tax Affairs, the average refund period should be reduced compared to the usual 13 days.

  
  

  • However, if the refund amount is less than €10, the Tax Authority may choose not to process the transfer.

    
    

Important Considerations

• Holiday and Christmas Bonus Compensation:

  • Taxpayers may be entitled to additional benefits related to holiday and Christmas bonuses. Be sure to review the specific documents provided by the tax authority to ensure you are claiming any applicable bonuses.

• Correction of Pre-filled Information:

  • If any of the pre-filled data is incorrect (for example, expenses for healthcare, education, or rent), you can manually correct the figures before submitting your IRS declaration. Ensure that all data entered is accurate to avoid complications.

  
  

Important Dates and Deadlines

Event	Date
Start of IRS submission period	April 1st
End of IRS submission period	June 30th
Minimum fine for late submission	€25 (before notification)
Refund period (average)	13 days

Final Notes

• If you are uncertain about any aspects of your IRS submission or would like professional assistance, it is highly recommended to seek the help of a tax consultant.

  
  

• A tax professional can guide you through the process, help you claim all applicable deductions, and ensure compliance with Portuguese tax laws.

For detailed guidance on submitting your IRS declaration and maximizing your tax benefits, feel free to reach out to INLIS Consulting. Our team of experts is here to provide personalized support and ensure that your tax filings are handled efficiently and correctly.

Contact INLIS Consulting today:

• Email: geral@inlis.pt

• Phone: +351 968 464 942