IRS Deductions in Portugal: What You Can Declare and How to Maximize Your Refund

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IRS Deductions in Portugal: What You Can Declare and How to Maximize Your Refund

In this article, we explain which expenses are deductible, their limits by category, and how to make sure they are properly included in your IRS return.

I’m a Foreigner Living in Portugal: Do I Have to File IRS?

In this article, we’ll explain clearly who needs to file the IRS, how tax residency is determined, and why it’s essential to stay compliant.

IRS: What is it?

The IRS (Imposto sobre o Rendimento das Pessoas Singulares) is the Portuguese personal income tax.

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Filing your IRS (Personal Income Tax) in Portugal isn’t just a legal obligation — it’s also an opportunity to recover part of your annual expenses. The Portuguese tax system allows for several deductible expenses, which can reduce the amount of tax owed or even increase your refund.

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‍What are deductible expenses in the IRS?‍

Deductible expenses are costs that the State allows you to subtract from your taxable income. The goal is to ease the tax burden for individuals and families.
These expenses are automatically recorded on the e-Fatura portal, as long as you request an invoice with your Portuguese Tax Identification Number (NIF) at the time of purchase or payment.‍

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Main categories of deductible expenses‍

Here are the main types of expenses you can declare on your IRS:‍

‍General family expenses

Deduction limit: up to €250 per taxpayer
Includes: groceries, clothing, utilities, fuel, electricity, water, etc.

Health expenses

Deduct 15% of eligible health costs, up to €1,000
Includes: doctor visits, exams, prescription medicine, health insurance.

Education and training

Deduct 30% of education expenses, up to €800
Includes: school tuition, books, tutoring, daycare and preschool fees.

Housing

Deduct 15% of mortgage interest (for older contracts) or rent payments, up to €600

Care for elderly or dependents

Deduct 25% of related expenses, up to €403.75

Public transport passes

Monthly public transport passes are also deductible.

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Pay attention to the e-Fatura portal!‍

It’s essential that your expenses are correctly registered on the e-Fatura portal. Throughout the year, check regularly that your invoices are being validated and classified correctly. In February, the portal opens for a limited time to confirm or correct your expenses, which is crucial for your deductions to count.‍

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Pro tip: Use apps or the portal to track your expenses

Keep your invoices organized by checking the e-Fatura portal or using apps that connect to your account. Staying on top of this throughout the year will make the IRS declaration much easier — and more beneficial.‍

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Want to make the most of your IRS deductions? Talk to E-Golden.

At E-Golden, our tax specialists can review your information and ensure all your eligible expenses are properly applied. With expert help, you avoid mistakes, gain peace of mind, and may even boost your refund.

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