Portugal Taxes for Expats and Digital Nomads (2026)

Portugal tax residency: the 183-day and habitual home tests

Portugal uses 2 tests, and meeting either one makes you resident. The first is presence: more than 183 days in Portugal, consecutive or not, in any 12-month period that starts or ends in the tax year. The second is a home: on any day of that period, you have a place in Portugal in conditions that suggest you mean to keep and use it as your habitual residence.

The home test has no day count. A 12-month lease on an apartment you treat as your base can make you resident long before day 184, which is why counting days alone is a weak plan for anyone who wants to stay non-resident.

Portugal income tax rates for 2026

Law 73-A/2025 set the 2026 table below. Each rate applies only to the slice of taxable income inside its band, so the 48% top rate reaches only income above €86,634 (about $98,600).

On top of the table, a solidarity surcharge adds 2.5% on taxable income from €80,000 to €250,000 (about $91,000 to $284,000) and 5% above €250,000 (about $284,000).

What a freelancer is taxed on: the simplified regime

Most new freelancers start on the simplified regime for self-employed income, which taxes a fixed share of revenue instead of actual profit. For professions in the art. 151 table that share is 75% of gross revenue, and other services use 35%.

Under the same CIRS art. 31, the share is cut by 50% in your first tax year of activity and by 25% in the second, and social security above 10% of revenue comes off taxable income. The 25% allowance only holds if you document expenses of at least 15% of revenue, so keep every receipt.

Social security is a separate bill: 21.4% on 70% of service revenue, with the monthly base capped at €6,445.56 (about $7,330). New self-employed people pay nothing for their first 12 months.

How Portugal taxes foreign income and remote work

A resident is taxed on all income, including income obtained outside Portugal. Work you do while living in Portugal is taxed there whether your clients are in Lisbon, London or Los Angeles, and a salary from a foreign employer is treated the same way.

The exception is narrow. IFICI's 20% regime exempts most foreign income for 10 years, but only for people in listed research, innovation and startup roles who were not resident in the previous 5 years. A freelancer selling services abroad or a remote employee of a foreign company does not qualify.

When 2 countries both treat you as resident, the tax treaty between them settles it, looking first at where you have a permanent home and then at where your personal and economic ties are. The proof a foreign tax office or client asks for is Portugal's tax residence certificate, issued through the Portal das Finanças to registered residents.

Filing your Portuguese tax return

Running your own company from Portugal

Moving to Portugal changes how a company you already own is taxed, even if it stays registered abroad. 3 rules decide the outcome.

The CFC rule for individuals applies when you hold at least 25% of a foreign entity under a clearly more favorable tax regime, or 10% where Portuguese residents together hold at least 50%. The profits are then taxed on you as they arise, so leaving them in the company defers nothing.

The second risk is where the company is run. A company with its head office or effective management in Portugal is Portuguese resident for corporate tax, and a foreign company whose only director makes every decision from an apartment in Porto fits that description. Moving yourself without changing how the company is managed can move the company with you.

Dividends you pay yourself from a company taxed normally abroad fall under the flat 28% rate, or 35% from a listed low-tax jurisdiction, and you can opt to add them to your other income at progressive rates instead. The jurisdictions founders incorporate in differ mostly in how they tax retained profit, and Portugal's CFC rule reaches the low-tax ones.

David's note

If your company sits in a zero or low-tax country, I would assume the CFC rule applies from your first year of Portuguese residence and settle the structure before you arrive. Restructuring once you are resident means paying Portuguese tax on the profits while you do it.

US citizens living in Portugal

The US taxes its citizens wherever they live, and the 1994 US-Portugal income tax treaty does not change that, because treaties generally do not reduce the US tax of US citizens. You still file a US return and avoid paying twice through the foreign tax credit or the 2026 foreign earned income exclusion of $132,900.

Portuguese rates are high enough that the credit usually leaves little US income tax on earned income. Social security is settled by the US-Portugal totalization agreement, which stops you paying into both systems on the same earnings.

NHR is closed, and IFICI skips most freelancers

NHR survives only for people registered before the cut-off, people who met the residence conditions by December 31, 2023, and people who became resident by December 31, 2024 with qualifying documents, each for the rest of their 10 years under the transitional rule.

The second trap is the early bill. The cuts to the taxable share in years 1 and 2 and the 12-month social security exemption make a new freelancer's first returns look cheap, and year 3 costs far more on the same revenue. Budget from the year 3 numbers in the worked example, not from your first assessment.