Personal income tax reports (2024 tax year)

What is the Personal Income Tax report?

The Model 3 Personal Income Tax report (declaração Modelo 3 de IRS) is the document through which individual taxpayers report their income, deductions, and withholding tax to the Tax and Customs Authority for a given fiscal year.

Since PIT operates under a self-assessment system (i.e., the tax due is calculated based on the information provided by the taxpayer in their report), it is crucial to ensure that the report is correctly filled out. This guarantees that all relevant information is accurately reported, avoiding errors that could result in incorrect tax assessments, penalties, or the loss of tax benefits.

In fact, the PIT report serves as the practical implementation of special tax regimes, such as the Non-Habitual Resident (NHR) regime, the Tax Incentive for Scientific Research and Innovation (TISRI\IFICI), the Programa Regressar (Return Program), or the PIT Jovem (Young PIT).

Who is required to submit a tax report?

• Anyone who is a tax resident in Portugal; or
• Anyone who is a non-resident but earns income from a Portuguese source.

As Portugal recognizes partial-year tax residency, a person may be classified as both a non-resident and a resident (or vice versa) within the same fiscal year, meaning they may need to submit more than one PIT report for the same fiscal year.

Taxpayers who only have Portuguese sourced employment of self-employment income (in this last case, only from services provisions and under the simplified regime) or Portuguese pensions have access to an “automatic” income report (declaração automática de IRS), which is a simplified reporting method that eliminates the need to manually fill out the Model 3 report and its annexes.  In this case, the taxpayer only needs to confirm the data pre-filled by the Tax and Customs Authority on their Portal (Portal das Finanças), based on the information available to them. After confirmation, the tax assessment is issued.

Additionally, some taxpayers may be entirely exempt from submitting a PIT report, particularly those who earn only employment income or pensions up to €8,500 per year, without withholding tax, receive only alimony payments up to €4,104 per year, earn only income subject to a final withholding tax (e.g., bank interest) and do not engage in self-employment or earn rental income, capital gains, or cryptoasset-related income.

What must be reported?

Residents must report:

• Their worldwide income, including certain tax-exempt or non-taxable income (e.g., the sale of real estate located in Portugal acquired before 1981 or the sale of cryptoassets held for more than 365 days); and
• Their assets: bank/financial accounts held abroad and assets located in tax havens.

Non-residents must report only their Portuguese-source income (unless it has already been subject to final withholding tax) and are not required to report assets.

What is the deadline for submitting the tax report?

The report must be submitted via the the tax authorities website (Portal das Finanças) between April 1 and June 30, 2025.

For those eligible for automatic PIT filing, the deadline for confirming the pre-filled information is the same. If the taxpayer does not confirm the data by the deadline, the report automatically becomes final on June 30, and the corresponding tax assessment is subsequently issued.

Can the submission deadline be extended?

Only if the taxpayer received foreign-source income for which they are entitled to a foreign tax credit, but the exact amount of foreign tax paid is not yet determined by June 30. In such cases, an extension may be requested, allowing the PIT report to be submitted until December 31, through the filling and submission of a specific report (Model 49 report).

What happens if the report is submitted after the  deadline?

Late submission (considering the initial or extended deadline) may result in fines ranging from €150 to €3,750, in addition to compensatory interest if tax is due. Interest is calculated from the deadline for submission at a rate of 4% per year.

How long should supporting documents be kept?

It is essential to maintain a supporting file for the report, including documentation that substantiates the reported information. The Tax and Customs Authority has up to 4 years to issue additional tax assessments (12 years for situations involving tax havens).

Final Notes

PIT is a self-assessed tax, meaning that any error or omission in the report may lead to incorrect tax assessments, penalties, or the loss of tax benefits.

The complexity of the Portuguese tax system requires special attention to the reporting of income and assets, as well as the correct application of legally provided benefits.

At Belim, we are available to assist you with preparing and submitting your PIT report(s) for the 2024 fiscal year.

📩 Contact us for more information.