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Personal Income Tax (IRS) was instituted via Decree-Law 442-A /88 of 30 November.

Personal Income Tax (IRS) is applied to the annual amount of income earned by individual persons, within six categories.

Residents are taxed on their total earned income (in Portugal and abroad) and non-residents are taxed on income they earn in Portugal (according to IRS categories). In 2009, a special, more attractive regime was created for non-habitual residents.

The characteristics, degree of application and categories of IRS in Madeira are the same as those that apply to Mainland Portugal and the only difference is in the rates that are applied to the income obtained in Madeira.

Bracket

Taxable income (€)

Normal Rate (%)

Medium Rate (%)

from 7 116

10,15

10,150

over 7 116 to 10 736

16,10

12,156

over 10 736 to 15 216

21,20

14,819

over 15 216 to 19 696

22,80

16,634

over 19 696 to 25 076

29,75

19,448

over 25 076 to 36 757

33,67

23,968

over 36 757 to 48 033

42,20

28,248

over 48 033 to 75 009

43,65

33,787

over 75 009

47,52

-

The amount of taxable income, when greater than €7 116, is divided into two parts: one of them being equal to the limit of the higher of the brackets it falls under, subject to the average rate of this bracket; and the other part equal to the remainder, which shall be subject to the normal rate of the bracket that is immediately higher.

For more information about the characteristics, degree of application and categories of IRS in Portugal click here.

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