The 15% Expense Proof Rule, Simplified Regime in Portugal (2026)

How it works

Under the simplified regime, the tax authority assumes 25% of your services revenue covers business expenses (the 0.75 coefficient means 75% is taxable, 25% is assumed costs).

There's a catch: you must prove at least 15% of your gross services income in documented expenses. If you fall short, the gap between your documented expenses and the 15% threshold gets added back to your taxable income.

This is a services-only rule. Sales of goods (vendas) use the 0.15 coefficient and are not subject to it.

What counts toward the 15%

Expense type	Counts?	Notes
Business expenses with NIF in e-fatura	Yes	Must be classified as professional expenses
Social Security contributions	Up to a point	Count toward the leg only up to 10% of your gross services (Art. 31 nº13 a) CIRS)
Specific deduction (~€4,587)	Yes	Applied automatically by AT. It's the lower bound of the automatic leg, not an addition on top of Social Security
Personal expenses (health, education)	No	These go to Anexo H deductions, not the 15%
Portuguese invoices without your NIF	No	Without your NIF the invoice is not linked to you in e-Fatura and cannot be used
Foreign supplier invoices (Stripe, AWS, etc.)	Yes, if declared	Not auto-captured by e-Fatura. Count toward the 15% if you register them manually on the e-Fatura portal (registar fatura as adquirente) or declare them in Anexo B Quadro 17. Keep originals and payment proof for 10 years (Art. 52 CIVA).

The math

The automatic coverage is a greater-of, not a sum. It is the higher of two things: the fixed specific deduction (dedução específica), or your Social Security counted up to 10% of your gross services. They do not add together.

Example: €40,000 in services income

• 15% threshold: €6,000 (0.15 × €40,000)
• Specific deduction: ~€4,587.09 (2026) (applied automatically)
• Social Security: ~€5,990 for the year, but it counts toward the 15% only up to 10% of your gross, which is €4,000 here

Because the capped Social Security (€4,000) is below the specific deduction, the automatic coverage is the ~€4,587.09 (2026) floor, not the two combined. That leaves you about €1,413 short of the €6,000 threshold. To close it, document real business expenses (equipment, software, professional services) before 31 December. Anything you can't document is added back to your taxable income.

This is an estimate to show the mechanism. Confirm your exact figures for your own income and Social Security situation.

Who usually needs to document extra

Because Social Security counts toward the 15% only up to 10% of your gross, the automatic coverage is capped. Below roughly €30,580 in services income, the specific deduction alone meets the 15% threshold, so you're covered with nothing to document. Above that, most services freelancers need real documented expenses to close the gap, and the higher the income, the larger the gap left open.

A few situations make the gap wider:

First-year freelancers. The first 12 months of activity are Social Security exempt, so the only automatic coverage is the ~€4,587.09 (2026) specific deduction. On roughly €30,580 in services income that exactly meets the 15% threshold. Earn more than that in year one, and you document the difference with real business expenses.

Freelancers with a reduced Social Security base. If you lowered your quarterly declaration (the Declaração Trimestral lets you adjust down by up to 25%), your contributions fall. Since only 10% of gross counts toward the 15% either way, the gap becomes your problem sooner.

Higher earners. The 15% threshold climbs with every euro of income, while the fixed specific deduction and the capped Social Security leg do not. The amount you need to document keeps growing above the break-even point.

Goods sellers (0.15 coefficient) are not subject to this rule at all.

How to track it

The only way to know where you stand is to track your documented expenses throughout the year. Finding out you're short when you file your IRS in June means it's too late to do anything about it for that tax year.

December is the last chance to make business purchases (equipment, software, training) that count toward the current year's 15% threshold.