Moving to Portugal is an attractive option for many expats, drawn by its charming landscapes, rich culture, and pleasant climate. However, relocating to Portugal also involves understanding and navigating the complexities of the Portuguese tax system. This guide aims to provide a comprehensive look at income tax in Portugal, especially for high earners, drawing on experiences and viewpoints shared by various expats.
Income Tax Rates and Brackets in Portugal
Portugal’s income tax system for residents is progressive, meaning tax rates increase with higher incomes. For 2023, these rates vary from 14.5% to 48%. This system ensures that individuals with higher incomes fall into higher tax brackets, leading to substantial tax liabilities for top earners. For example, a salary of €120,000 places a taxpayer in one of the higher brackets.