Finances in Portugal
Getting your finances sorted when preparing to move to Portugal or while living in here may seem overwhelming. From getting your fiscal number to opening a bank account to income tax. Here you will find a general overview of all you need to know.
Fiscal Number (NIF)
Regardless of your residency status, you will need a Número de Identificação Fiscal (NIF) in order to carry out most financial activities including buying a house, car, opening a bank account, signing a mobile phone contract and so on.
You can apply for a NIF number through your local Finanças (tax office) in Portugal or at a local Citizen Shop. If you want to apply from outside Portugal, you can obtain a temporary number through a Portuguese lawyer.
Portugal has an advanced banking system that is comparable or even better than many other European countries. Most banks offer excellent online access through websites and mobile apps. The majority of large payments are managed electronically, either online or through the Multibanco (ATM) system. Cheques are becoming rare.
Multibanco machines are plentiful and in addition to withdrawing cash, they can be used to make payments including such items as utility and tax, bills, tickets for concerts and cinema and other general purchases. You can also transfer money between banks accounts, obtain statements and top up mobile phone cards among many other features.
Under an EU directive, each EU country provides a bank deposit guarantee of €100,000. In the event a bank fails, the national deposit guarantee scheme (Fundo de Garantia de Depósitos) will refund your savings, up to the limit of €100,000.
To open a bank account in Portugal, you will need proof of ID, tax number, residency card and proof of address through a recent utility bill or rental contract. You will also need to make a deposit, usually a minimum of €250.
If you elect to pay income tax in Portugal, you must register with Finanças and then file an annual tax return after the end of the tax year which coincides with the calendar year. You can do this online if your Portuguese is up to it, or you can appoint a lawyer or accountant for a reasonable fee. There are fines for late filing and late payments. Full details of the tax requirements, rates and allowances can be viewed by clicking here.
Imposto sobre o Valor Acrescentado (IVA) = VAT or Sales Tax
The standard rate of VAT in Portugal is 23%. There are some reductions for essential services and foodstuffs. In general, IVA will be included on display prices of products but it is often excluded on quotations for services such as building work, so this is worth checking with the supplier.
Other Taxes in Portugal
Other taxes to be aware of are:
- IMI – annual tax paid on the value of a property or real estate.
- IMT – levied on the sale of property or real estate and payable by the purchaser.
- ISV – levied on the sale of new and used motor vehicles and payable by the purchaser.
- IUC – annual road tax on motor vehicles.
- CGT – capital gains tax levied on the profit obtained from the sale of a house or real estate but subject to allowances.
The above is given as guidance only and for all taxation matters, we recommend that you seek the advice of an expert individual or company and recommend TaxTeam Consulting and Blevins Franks in Portugal.
If you would prefer to have a company arrange all your paperwork for you, we highly recommend Ei! Migrante.
If you are looking to send money abroad consider TransferWise. It’s a great tool for sending and receiving money internationally with low fees — much cheaper than using your local bank. You can also get your own local bank account details in Europe, UK, US, Australia and New Zealand with the TransferWise Borderless account.
Real Estate In Portugal
Looking for your dream home in Portugal? Explore Expats Portugal real estate listings for homes, renovation projects, holiday stays for every budget.
- For sale, long term and short term rentals
- Houses, apartments, ruins, farms and land
- Want to advertise? List your real estate easily
Do you have questions about being an expat or permanently immigrating to Portugal?
Browse our forum community for your answers and meet our community.