The new portuguese tax regime for individuals under 35

A reduction in personal income tax (IRS) for young people up to the age of 35 living in Portugal has been approved.

Autores: Cátia Pereira Baptista, Lawyer and Team Leader, and Isadora Costa Angeli, Jurist

Portugal’s current economic, social and political situation has attracted the attention of citizens from all over the world, leading many to opt for a permanent move to the country, and there has been a noticeable increase in the influx of foreign citizens into Portuguese territory.

Attractive tax regimes, such as the status of Non-Habitual Residents (NHR), together with immigration programs such as the Golden Visa Program – Residence Permit for Investment – the D2, D7 and Digital Nomad visas, among others, explain this increase in demand for Portugal. The safety and quality of life offered by the country also play a decisive role in this trend.

On the 23rd of May 2024, the Council of Ministers approved a reduction in Personal Income Tax (IRS) for young people residing in Portugal up to the age of 35, a measure that reinforces the country’s fiscal attractiveness.

The proposed law creates a new Youth Personal Income Tax regime (“IRS Jovem”) with a maximum applicable rate of 15% for all employment income in categories A (employed) and B (self-employed) of young people up to the age of 35, up to the 8th bracket, i.e. those who receive up to 81,199 euros gross per year, regardless of their academic level.

Thus, young workers up to the age of 35 will have a specific IRS table, based on the general table, with nine brackets, but with lower rates, except for the last bracket (where the rate to be applied to this slice of income remains the current rate of 48%).


                                                                                                                                                  Source: Portuguese Republic


This proposal to lower the IRS will now have to be discussed in the Parliament. If the Parliament approves the idea presented by the government to reformulate the “IRS Jovem” rules, from 1st January 2025 workers residing in Portugal who are up to 35 years old on December 31st of each year will pay less tax.

Portugal offers several ways to obtain residency, contact us for further information.

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