Portugal's simplified regime assumes a 15% margin for goods sellers. What if yours is lower?

Portugal's simplified tax regime applies a 0.15 coefficient to goods sales. That means the tax authority treats 15% of your gross revenue as taxable income and assumes the remaining 85% went toward expenses.

If your actual margin is comfortably above 15%, the regime works in your favor. You're running a simpler business tax setup and being taxed on less than you actually earned.

If your margin is below 15%, you're being taxed on income that exceeds your real profit.

What the coefficient actually means

The simplified regime (regime simplificado) for individual sole traders in Portugal doesn't ask for receipts or expense tracking for the purpose of calculating taxable income. Instead, it applies a coefficient to your gross revenue and calls that your taxable base.

For services (most Art. 151 professions), the coefficient is 0.75. For goods sales, local accommodation in standard properties, and restaurant and hospitality services, it is 0.15.

The design logic is sensible: goods businesses typically have high cost-of-goods ratios, so the law grants a larger assumed expense deduction. A 0.15 coefficient on goods says: we assume 85 cents of every euro you earn went toward costs. We'll only tax the remaining 15 cents.

This assumption breaks down when your actual expenses are higher than 85%.

A concrete example

A Portugal-based dropshipper brings in 50,000 euros gross revenue in 2026. Products sourced from a supplier and shipped directly to EU customers. Cost of goods and shipping: 45,000 euros. Actual profit: 5,000 euros. Real margin: 10%.

Under the simplified regime:

Taxable income = 15% x 50,000 = 7,500 euros

The tax authority doesn't see the 45,000 euros in inventory costs. The assumption is that every goods seller has a 15% margin. If yours is 10%, the system still calculates taxable income as though you earned 7,500 euros.

You pay IRS on 7,500 euros when your actual profit was 5,000 euros. You're funding the gap out of money you don't have.

The three options for a thin-margin goods business

Simplified regime as sole trader (regime simplificado): You pay IRS on 15% of gross, regardless of actual costs. If your margin is above 15%, this is good. Below 15%, you're taxed on phantom income. No accountant required for the tax calculation itself, but you still file quarterly Social Security declarations.

Regime geral as sole trader: Organized accounting with a certified accountant (contabilista certificado). Your real profit is what gets taxed. At 50,000 euros gross and 45,000 euros costs, your taxable base is 5,000 euros. You pay IRS on 5,000 euros, not 7,500 euros. The accountant typically costs 600-1,200 euros per year at this scale. For the dropshipper in the example above, regime geral saves 2,500 euros of taxable income. At a marginal rate of 28%, realistic if this income sits on top of a salary or other earnings, that is roughly 700 euros saved. On its own at this level it would be less, since 7,500 euros falls in the lowest IRS bracket. Depending on your accountant cost, that may or may not pencil out in year one.

Lda with IRC regime geral: A Portuguese company pays corporate tax (IRC) instead of personal IRS on business income. Under regime geral IRC with PME status, the tax rate on the first 50,000 euros of profit is 15%. On the example's 5,000 euros profit, that is 750 euros in company tax. Then you still need to extract the money as salary or dividends, which triggers additional IRS or withholding. But the base company tax on a thin-margin goods business at 5,000 euros actual profit is significantly lower than personal IRS on the inflated 7,500 euros. An Lda also adds formation costs, mandatory accountant, and annual accounting overhead that may not be justified at small scale.

The Lda vs sole trader calculator runs these comparisons for your specific numbers.

When simplificado is fine for goods sellers

The simplified regime is well-suited for goods sellers with genuine margins above 15%: artisans, craft sellers, curated product businesses. If you're making and selling pottery or handmade furniture, your materials might be 50% of revenue and the rest is your labor. You have a 50% real margin. The simplified regime's assumed 85% expense deduction is more generous than your actual situation. You win.

The problem is concentrated in resale with thin markups: dropshipping with heavy competition, distribution with fixed supplier prices, or any goods business where cost of goods is 80-90% of revenue.

At margins below 15%, the simplified regime taxes you on income you did not earn. That is not a gray area. It is the math.

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The figures above apply to the 2026 tax year. Tax rules change annually. The goods coefficient has been stable in recent years but verify current rates with a certified accountant (contabilista certificado) or at the AT portal before making decisions based on them.