This is a weekly series of articles about the rules and changes in the IRS system which will apply to the individual income tax declarations for 2019. The respective series about IRS income can be read in The Resident and the series about IRS procedures are to be found in Portugal News.
General Expenses – an overview
To make the most of the interactive tax system, you should give your tax number (“NIF”) on invoices for any expense in order to be entitled to the following tax deductions: class=WordSection2>
- 35% of general family expenses up to €250 maximum per taxpayer (€715 in expenses p.p.)
15% of health expenditure (including health insurance, up to a maximum of €1,000);
- 30% of education expenses up to a maximum of €800;
- 15% of the costs of housing rent, up to a maximum of €502 or
15% of the costs of loan interest to principal residence, up to a maximum of €296;
- 25% of the costs of Nursing Homes, up to €403.75;
- 15% of the VAT paid on each invoice for the expenses for restaurant, hairdressing and
automobile and motorcycle repairs, up to a maximum of €250.
When requesting invoices for purchases, be sure to include your tax number (“NIF”) so that shops and businesses can automatically report the transaction for a tax credit. The Portuguese Tax Authority (“AT”) will list automatically all of your eligible expenses on your personal page on the Finanças web site, which can be consulted and approved by you online.
Where taxable income (per adult) exceeds €7.000, the sum of health, education, property, retirement home and maintenance allowances is capped at €1.250, reducing progressively to nil on incomes exceeding €80.000 (per adult). There is a 10% increase to the cap per child.
|Description||Limit per person|
|15%||Medical Expenses and Health Insurance||€1 000|
|Loan interest for housing||€296|
|20%||Retirement saving plans (PPR)||€600 – €800|
|Public capitalization regime||€350|
|Alimony / Child Support||no limit|
|Donations – State||no limit|
|Donations – other entities||up to 15% of tax due|
Personal and Family Tax Credits
All taxpayers are entitled to personal credits depending on their civil status in relation to the family group (rather than specific income).
|Credit for each||Amount|
|Single, Single with Dependents, Couples||replaced by General Family Tax Credit|
|Each Dependent Child – earning less than the minimum wage children under age 3||€ 600 € 725|
|Elderly Dependents – with income not exceeding Basic S.S. Pension, residing with taxpayers: Only one cohabiting elderly dependent:||€ 525 € 710|
|Handicapped Dependents||€ 1 187.50|
Next Monday: Medical expenses
Dennis Swing Greene
info at madeira-weekly.com