Personal Income Tax (PIT) was instituted via Decree-Law 442-A /88 of 30 November.
Personal Income Tax 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 PIT categories). In 2009, a special, more attractive regime was created for non-habitual residents.
The characteristics, degree of application and categories of PIT 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 (%) | Average Rate (%) |
| 1 | from 8 342 | 8,75 | 8,750 |
| 2 | over 8 342 to 12 587 | 10,99 | 9,505 |
| 3 | over 12 587 to 17 838 | 14,84 | 11,076 |
| 4 | over 17 838 to 23 089 | 16,87 | 12,394 |
| 5 | over 23 089 to 29 397 | 21,77 | 14,406 |
| 6 | over 29 397 to 43 090 | 24,43 | 17,591 |
| 7 | over 43 090 to 46 566 | 30,17 | 18,530 |
| 8 | over 43 566 to 86 634 | 31,22 | 24,399 |
| 9 | over 86 364 | 33,60 | - |
The amount of taxable income, when greater than €8 342, is divided into two parts: one of them being equal to the limit of he 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 PIT in Portugal click here.
