Municipality Benefit on Personal Income Tax (IRS) in 2024

Since 2008, residents in Portugal's municipalities have been offered the opportunity to benefit from a tax incentive called floating participation on IRS (participação variável no IRS). This is part of the inter-municipality financial regime, known as Regime Financeiro das Autarquias e Entidades Intermunicipais in Portuguese.

The law states that each municipality is entitled to float participation every year, ranging from 0% to 5% of the IRS derived from taxpayers with a tax residence in the same municipality. This benefit aims to attract more taxpayers to the local territories, ultimately resulting in increased tax collection for the local governments.

How to access this tax benefit?

Individuals and their families residing in a Portuguese municipality that provides the personal income tax benefit may be eligible to benefit from it.

If you are planning to relocate to Portugal and wish to take advantage of the opportunities available, there are various residence permits you can apply for. European Union citizens will require a Certificate of Residency (CRUE). For those outside the European Union, several residence permits, including the popular Portuguese D7 Visa, are available for application.

Know how to have this benefit?

In order to benefit from this tax incentive, it is important to be aware of the legal deadlines. The municipality must communicate with the Portuguese Tributary and Customs Authority (AT), until the 31st of December 2023 indicating the rate (ranging from 0% to 5%) from the IRS that they wish to retain for themselves.

As for the taxpayer, it is mandatory to complete and submit the IRS statement between the 1st of April 2024 and the 30th of June 2024 to be eligible for the tax benefit. Failure to meet this deadline will result in the loss of the tax incentive.

How can you confirm that you gain from this tax benefit?

The subtraction will be applied automatically by the Portuguese Tributary and Customs Authority (AT) at the time of tax settlement. To confirm receipt of the benefit, check your tax settlement bill for the line that says, “municipal benefit.”

Know how to calculate your IRS benefit?

The deduction on the IRS is not the same for all taxpayers in each municipality as it varies. To calculate the reduction, you need to know the percentage retained by your municipality and deduct it from the maximum rate, which is 5%. For instance, if your municipality decides to retain 3% of the taxpayer's IRS, the taxpayer will receive a 2% return rate (5% - 3% = 2%).

What is the retention rate from each Portuguese municipality?

In the next list, we provide you with the retention rate from each Portuguese municipality:

Continental Portugal:

Abrantes 4,50%

Águeda 0,00%

Aguiar da Beira 0,00%

Alandroal 5,00%

Albergaria-a-Velha 2,75%

Albufeira 0,00%

Alcácer do Sal 4,00%

Alcanena 4,80%

Alcobaça 2,40%

Alcochete 4,00%

Alcoutim 0,00%

Alenquer 4,80%

Alfandega da Fé 5,00%

Alijo 3,00%

Aljezur 0,00%

Aljustrel 5,00%

Almada 3,50%

Almeida 0,00%

Almeirim 5,00%

Almodôvar 4,00%

Alpiarça 5,00%

Alter do Chão 2,50%

Alvaiázere 2,50%

Alvito 4,00%

Amadora 3,80%

Amarante 5,00%

Amares 5,00%

Anadia 3,00%

Ansião 3,00%

Arcos de Valdevez 3,00%

Arganil 0,00%

Armamar 1,00%

Arraiolos 5,00%

Arronches 0,00%

Arruda dos Vinhos 3,80%

Aveiro 5,00%

Azambuja 5,00%

Baião 5,00%

Barcelos 4,75%

Barrancos 5,00%

Barreiro 5,00%

Batalha 5,00%

Beja 5,00%

Belmonte 2,50%

Benavente 2,50%

Bombarral 3,50%

Borba 4,00%

Boticas 0,00%

Braga 3,00%

Bragança 5,00%

Cabeceiras de Basto 2,00%

Cadaval 2,50%

Caldas da Rainha 2,00%

Caminha 5,00%

Campo Maior 5,00%

Cantanhede 5,00%

Carrazeda de Ansiães 0,00%

Carregal do Sal 5,00%

Cartaxo 5,00%

Cascais 5,00%

Castanheira de Pera 0,00%

Castelo Branco 1,50%

Castelo de Paiva 5,00%

Castelo de Vide 2,50%

Castro Daire 3,00%

Castro Marim 3,50%

Castro Verde 4,00%

Celorico da Beira 4,00%

Celorico de Basto 4,00%

Chaves 5,00%

Cinfães 3,00%

Coimbra 5,00%

Condeixa-a-Nova 5,00%

Constância 5,00%

Coruche 3,00 %

Covilhã 5,00%

Crato 5,00%

Cuba 5,00%

Elvas 5,00%

Entroncamento 5,00%

Espinho 4,50%

Esposende 5,00%

Estarreja 3,00%

Estremoz 3,50%

Évora 3,50%

Fafe 3,00%

Faro 5,00%

Felgueiras 4,34%

Ferreira do Alentejo 5,00%

Ferreira do Zêzere 1,00%

Figueira da Foz 3,25%

Figueira de Castelo Rodrigo 0,00%

Figueiró dos Vinhos 3,00%

Fornos de Algodres 5,00%

Freixo de Espada a Cinta 5,00%

Fronteira 0,00%

Fundão 5,00%

Gavião 0,00%

Gois 2,50%

Golegã 5,00%

Gondomar 5,00%

Gouveia 4,00%

Grândola 5,00%

Guarda 4,00%

Guimarães 5,00%

Idanha-a-Nova 2,50%

Ílhavo 4,00%

Lagoa (algarve) 2,00%

Lagos 0,00%

lamego 4,00%

Leiria 5,00%

Lisboa 0,50%

Loulé 0,00%

Loures 4,75%

Lourinhã 3,75%

Lousada 4,00%

Lousã 4,00%

Macedo de Cavaleiros 1,00%

Mafra 4,75%

Maia 5,00%

Mangualde 4,00%

Manteigas 0,00%

Marco de Canaveses 3,00%

Marinha Grande 5,00%

Marvão 2,50%

Matosinhos 5,00%

Mação 4,00%

Mealhada 2,00%

Meda 5,00%

Melgaço 5,00%

Mértola 3,00%

Mesão Frio 3,00%

Miranda do Corvo 4,00%

Miranda do Douro 2,50%

Mirandela 2,00%

Mogadouro 0,00%

Moimenta da Beira 4,50%

Monchique 2,50%

Mondim de Basto 3,50%

Monforte 5,00%

Montalegre 5,00%

Montemor-o-Novo 3,00%

Montemor-o-Velho 4,50%

Montijo 4,00%

Monção 2,00%

Mora 5,00%

Mortágua 0,00%

Mourão 3,00%

Murtosa 4,00%

Murça 2,50%

Nazaré 5,00%

Nelas 4,00%

Nisa 2,50%

Óbidos 1,00%

Odemira 3,50%

Odivelas 5,00%

Oeiras 4,70%

Oleiros 0,00%

Olhão 4,00%

Oliveira de Azeméis 5,00%

Oliveira de Frades 5,00%

Oliveira do Bairro 0,00%

Oliveira do Hospital 5,00%

Ourem 5,00%

Ourique 2,50%

Ovar 2,00%

Palmela 5,00%

Pampilhosa da Serra 0,00%

Paredes 5,00%

Paredes de Coura 3,00%

Paços de Ferreira 5,00%

Pedrógão Grande 1,00%

Penacova 4,00%

Penafiel 5,00%

Penalva do Castelo 4,00%

Penamacor 0,00%

Penedono 0,00%

Penela 5,00%

Peniche 3,00%

Peso da Régua 5,00%

Pinhel 5,00%

Pombal 2,50%

Ponte da Barca 4,00%

Ponte de Lima 0,00%

Ponte de Sor 3,50%

Portalegre 3,50%

Portel 5,00%

Portimão 5,00%

Porto 3,50%

Porto de Mos 2,50%

Povoa de Lanhoso 4,50%

Povoa de Varzim 4,00%

Proença-a-Nova 2,50%

Redondo 3,00%

Reguengos de Monsaraz 5,00%

Resende 0,00%

Ribeira de Pena 5,00%

Rio Maior 4,60%

S. Brás de Alportel 5,00%

S. João da Madeira 4,50%

S. João da Pesqueira 5,00%

S. Pedro do Sul 2,00%

Sabrosa 0,00%

Sabugal 0,00%

Salvaterra de Magos 5,00%

Santa Comba Dão 4,40%

Santa Maria da Feira 5,00%

Santa Marta de Penaguião 0,50%

Santarém 4,50%

Santiago do Cacém 5,00%

Santo Tirso 3,50%

Sardoal 5,00%

Sátão 5,00%

Seia 2,50 %

Seixal 5,00%

Sernancelhe 5,00%

Serpa 5,00%

Sertã 2,50%

Sesimbra 5,00 %

Setúbal 3,50%

Sever do Vouga 2,50%

Sines 3,75%

Sobral de Monte Agraço 5,00%

Soure 5,00%

Sousel 5,00%

Tábua 5,00%

Tabuaço 5,00%

Tarouca 5,00%

Tavira 2,50%

Terras de Bouro 5,00%

Tomar 4,00%

Tondela 2,50%

Torre de Moncorvo 5,00%

Torres Novas 5,00%

Torres Vedras 3,75%

Trancoso 0,00%

Trofa 4,80%

Vagos 2,50%

Vale de Cambra 2,50%

Valença 2,00%

Valongo 5,00%

Valpaços 5,00%

Vendas Novas 5,00%

Viana do Alentejo 2,50%

Vidigueira 5,00%

Vieira do Minho 0,00%

Vila de Rei 2,50%

Vila do Bispo 0,00%

Vila Flor 0,00%

Vila Franca de Xira 4,75%

Vila Nova da Barquinha 4,50%

Vila Nova de Cerveira 3,00%

Vila Nova de Famalicão 4,50%

Vila Nova de Foz Côa 5,00%

Vila Nova de Gaia 2,50%

Vila Nova de Poiares 5,00%

Vila Pouca de Aguiar 5,00%

Vila Real 5,00%

Vila Real de Santo António 5,00 %

Vila Velha de Ródão 5,00%

Vila Viçosa 3,00%

Vimioso 5,00%

Vinhais 0,00%

Viseu 4,00%

Vizela 3,50%

Vouzela 5,00%

Azores Archipelago:

Angra do Heroísmo 5,00%

Calheta 0,00%

Corvo 5,00%

Horta 4,50%

Lagoa 5,00%

Santa Cruz das Flores 0,00%

Santa Cruz da Graciosa 3,00%

Lajes das Flores 2,00%

Lajes do Pico 5,00%

Nordeste 5,00%

Velas 0,00%

Madalena 5,00%

Povoação 2,50%

Vila Praia da Vitória 5,00%

Ribeira Grande 1,75%

Ponta Delgada 3,50%

Vila Franca do Campo 5,00%

Vila do Porto 5,00%

S. Roque do Pico 5,00%

Madeira Archipelago:

Calheta 0,00%

Camara de Lobos 3,50%

Funchal 0,00%

Machico 4,00%

Porto Santo 3,75%

Ponta do Sol 0,00%

S. Vicente 5,00%

Santana 0,00%

Santa Cruz 4,00%

Ribeira Brava 5,00%

If you have any further questions or require assistance on this matter or related issues, please feel free to reach out. We will be delighted to assist you.