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IRS Deductions from Tax (Deduções à Coleta) in Portugal: What They Are and Their Limits
🧮 How They Work
- Your taxable income is taxed at progressive rates → tax (coleta)
- The deductions from tax are subtracted from that amount
- The result is the tax due (before withholdings)
Deductions can’t make the tax negative — they only reduce it to zero.
👨👩👧 Personal and Family Deductions
- Each dependant: €600; €726 if up to 3 years old; €900 from the second dependant up to 6 years old
- Each ascendant living with you (with low income): €525, or €635 if only one
- Disability: additional deductions for taxpayers, dependants or ascendants with a disability of 60% or more
🧾 Expenses (with Invoices on e-Fatura)
- General family expenses: 35%, up to €250 per taxpayer (45% up to €335 for single-parent families)
- Health: 15%, up to €1,000 per household
- Education: 30%, up to €800 per household (more for schools in the interior or for students living away from home)
- Rent of permanent home: 15%, with a limit that has been increasing (up to €900 in 2026, higher for lower incomes)
- Mortgage interest (contracts until 2011): 15%, up to €296
- Care homes: 25%, up to €403.75
- VAT on invoices (restaurants, car repairs, hairdressers, vets, gyms, culture, public transport): up to €250 per household
- Alimony paid by court decision: 20%, no limit
- PPR (retirement savings): 20%, up to €400/€350/€300 depending on age
- Donations, domestic work and other specific deductions
📏 The Global Limit for Higher Incomes
The sum of most deductions (excluding personal and family deductions, general family expenses and double taxation credit) is capped according to your taxable income:
- First bracket: no global limit
- Middle brackets: a limit decreasing from €2,500 to €1,000
- Top bracket: €1,000
The limit is increased by 5% for each dependant in households with three or more.
⚠️ Important Rules
- Invoices must have your NIF (or your dependants’) and be validated on e-Fatura by the end of February
- In separate taxation, deductions for dependants and common expenses are split 50/50 between spouses
- Deductions only reduce tax from income taxed at progressive rates — not flat-rate taxes on rents or investments (unless aggregated)
- Non-residents generally don’t benefit (except if taxed as residents)
💡 Practical Tips
- Always ask for invoices with your NIF.
- Check e-Fatura every month and classify pending invoices.
- Renting? Make sure the landlord issues electronic receipts.
- High income? The global limit may make some deductions useless — plan accordingly.
🚀 Final Considerations
Deductions from tax are where most families save on IRS. Knowing the categories, percentages and limits — and keeping e-Fatura up to date — makes sure you get everything you’re entitled to.
📢 Expert Advice: Review e-Fatura before the end of February every year. A few minutes classifying invoices can mean hundreds of euros in your refund.
Want to make the most of your IRS deductions? Step Inside Portugal’s tax team can review and prepare your return — find out more about our tax services here. ✨
This article is for general information only and doesn’t constitute tax advice. Limits for income earned in 2026.
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