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Self-employed (recibos verdes): 5 things to check before the end of the year
Step Inside Accounting · Practical guide
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1. The 15% rule: do you have enough expenses?
Under the simplified regime, for professional services only 75% of what you invoice counts for IRS, the income tax (or 35% for non-professional services). For that, 15% of your turnover must be backed by expenses. If it is not, the difference is added to your taxable income.
The law already counts part of that amount automatically: in 2026, about €4,587. Only what goes beyond that needs invoices for business expenses. See also simplified regime or organised accounting.
Example
You invoiced €40,000 in 2026. 15% is €6,000 and the law already counts €4,587. You need €1,413 of justified expenses. Without them, that €1,413 becomes subject to IRS.
2. Sort out your invoices in e-fatura and keep your accounts separate
Expenses only count if they are in e-fatura, with your tax number (NIF), and marked as expenses of your professional activity. Log in to the Portal das Finanças, open e-fatura and check the pending invoices. The deadline to classify your 2026 invoices runs until the end of February 2027, but it is easier to do it now, while you still remember each expense.
Expenses you also use privately, such as internet or your phone, only count for 25% of their value. To avoid doubts, keep a bank account and a card just for your business.
3. Keep an eye on the €15,000 VAT exemption limit
If you are VAT-exempt, you can invoice up to €15,000 a year. If you go over €15,000 this year but stay within €18,750, you keep the exemption until 31 December and start charging VAT from January.
What counts for this limit is services located in Portugal: services to clients resident in Portugal and services considered to be supplied here, such as real estate brokerage commissions on properties located in Portugal.
If you go over €18,750, you lose the exemption straight away: you must charge VAT on the invoice that crosses that amount and file a change declaration with the Tax Authority within 15 working days. Do the maths before issuing the last invoices of the year.
Example
You have already invoiced €17,000 this year and have a €2,500 job to invoice in December. With it you reach €19,500, so that invoice must already include VAT.
4. Check the withholding tax
When your client is a company or has organised accounting, it generally has to withhold IRS from what it pays you. For the professional activities in the IRS table, the withholding rate is 23%. It is not an extra cost: it is an advance on your IRS, deducted in your annual return.
If you expect to invoice less than €15,000 a year, you can claim the withholding exemption on the invoice-receipt (fatura-recibo). If you go over that amount, withholding starts on the next invoice. Before the end of the year, check on the Portal das Finanças that the withholdings reported by your clients match your invoices.
5. Prepare your January Social Security declaration
In January you file the quarterly declaration with what you invoiced in October, November and December, by the end of the month. The contribution is 21.4% of 70% of what you invoiced for services, divided over the three months, and is paid between the 10th and the 20th of each month.
When you start your activity, the obligation to pay only begins after 12 months. If you do not have a Social Security number yet, see our article on the NISS.
Example
You invoiced €9,000 for services in the last quarter. The relevant income is €6,300 (70%), that is, €2,100 a month. The contribution is €449.40 a month (21.4%) for the following three months.
Team tip
Do this review in December, while you can still buy what you need for your business, issue the last invoices with the right VAT and prepare the January declaration. If you prefer, we can take care of all of it for you.
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This article is for information only and does not replace professional advice. Figures and rules are those in force at the date of publication and may change.
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