If you come to live in Portugal or plan to invest here, you will need to register with the Tax Authority to acquire the Tax Identification Number.
The TIN is an essential reference without which you cannot open a bank account, buy a house or a car, or even subscribe to an internet service.
Citizens and companies in Portugal, pay direct taxes, and indirect taxes.
Direct taxes are calculated based on income, in which whoever has a higher income ends up paying a higher rate.
Indirect taxes are in a more significant number and are paid indirectly by acquiring products or services.
The IRS that is, income tax of natural persons.
The IRC, corporate income tax.
The TSU, that is, the single social rate, which, although it is called a rate, is a tax that directly affects workers’ earnings.
TSU is a rate deducted from the salary to contribute to the financial sustainability of social security, ensuring that the taxpayer later has access to the enjoyment of his retirement;
The IMI, or municipal property tax. It is determined and applied by each municipality in Portugal; the amount charged directly affects the value of the property’s. IMI payments occur yearly.
The VAT – Value Added Tax.
VAT is the indirect tax, best known to most Portuguese families. It is found in practically all products, goods and services, varying only in the rate applied depending on its function and degree of importance. There are three VAT rates.
In Continental Portugal, reduced (6%), intermediate (13%) and the ordinary and generally applied (23%).
In Azores, reduced (4%), intermediate (9%) and the ordinary and generally applied (18%).
In Madeira, reduced (5%), intermediate (12%) and the ordinary and generally applied (22%).
ISV and IUC
The ISV – Vehicle Taxes and IUC, the Single Circulation Tax.
ISV is charged for purchasing a motor vehicle, being taxed on the first registration. The IUC – Single Circulation Tax, which replaced the “automobile stamp”, is paid annually.