Despesas Dedutíveis

Under the Portuguese simplified tax regime (regime simplificado), expenses work differently from what most freelancers expect. There is no line-item expense deduction. Instead, the system applies a fixed coefficient to your gross income and treats the remainder as assumed business costs.

How the coefficient replaces expense deductions

For most IT, design, consulting, and professional freelancers registered under Art. 151 CIRS, the coefficient is 0.75. This means:

• 75% of your gross income is taxable
• 25% is automatically treated as assumed business costs (no receipts needed for this portion)
• Social Security contributions are deducted separately on top

You cannot substitute actual expenses for the 25% assumed costs, and you cannot add to them. The coefficient is fixed.

The 15% documented expense requirement

Here is where actual receipts matter. Article 31 of the CIRS requires that freelancers on the simplified regime document at least 15% of their gross income in qualifying business expenses. If you fall short of 15%, the taxable base increases by the difference.

Three categories count toward the 15%:

1. The €4,104 specific deduction. This is automatic. No receipts required, no action needed.
2. Social Security contributions. Your quarterly SS payments count in full.
3. Supplier invoices for goods and services used in your activity. Portuguese suppliers communicate invoices to AT through e-Fatura automatically. Foreign suppliers (AWS, Stripe, GitHub, Vercel, OpenAI) do not. You must either register those invoices manually on the e-Fatura portal or declare them in Quadro 17-C of Anexo B when you file your Modelo 3.

Who actually hits the shortfall

For most freelancers paying full Social Security, the 15% threshold is satisfied automatically. SS contributions alone approximate 15% of gross (21.4% rate on a base of ~70% of income). The shortfall only opens for three groups:

First-year freelancers who are SS-exempt. New registrations qualify for a 12-month Social Security exemption. With no SS contributions and only the €4,104 floor, the threshold is covered only up to roughly €27,000 of gross income. Above that, you need documented supplier invoices.

Freelancers with reduced SS contributions. If your quarterly Declaração Trimestral reduces your base by 25% (a permitted adjustment), your SS contributions may fall below the 15% threshold at higher income levels.

High earners above roughly €110,500 gross. Social Security contributions cap at approximately €16,550 per year (12 times the maximum monthly base). Above the cap, the 15% threshold keeps rising while SS stays flat. At €150,000 gross, the 15% threshold is €22,500 but capped SS is still €16,550. The gap must be filled with documented expenses.

Foreign-supplier invoices: what to do

Foreign invoices do not appear in e-Fatura automatically. To count them toward the 15%, you have two routes:

Route A: Log into e-Fatura and register each invoice manually under "Registar Fatura" (as acquirer). Enter the supplier details, date, and amount. This creates an electronic record.

Route B: Declare them directly in Quadro 17-C (Anexo B, Modelo 3) when you file. This route requires keeping the original invoice and payment proof for 10 years (Art. 52 CIVA).

Both routes are equally valid. There is no preference for Portuguese-issued invoices under Art. 31 CIRS: the law requires that expenses be verified, not that they originate domestically.

Retention: 10 years, not 4

The document retention obligation for business expenses is 10 years from the end of the civil year of the transaction (Art. 52 CIVA). The "4-year" figure that circulates in some guides refers to the AT's window to assess your returns (caducidade), which is a different and shorter clock. Keep supplier invoices and payment proofs until the 10-year period closes.

Compliant digital scans are accepted under DL 28/2019: a legible scan with full integrity controls has the same evidentiary value as a paper original.

The simplified regime vs organised accounting

If your actual business expenses exceed the 25% assumed by the coefficient, the simplified regime may not be optimal. Under organised accounting (contabilidade organizada), you deduct real expenses in full. The simplified regime is simpler and covers most freelancers well, but a contabilista certificado can tell you which regime produces a lower tax bill for your specific situation.