Can I deduct business expenses under Portugal's simplified regime?

Not in the way you might expect. Under simplified regime, AT applies a fixed coefficient to your gross receipts instead of letting you deduct actual expenses. For most service providers, 75% of gross income is taxable. You don't itemise individual expenses, but you do need to document at least 15% of your receipts as actual expenses, or AT adds back the difference.

What is the 15% expense rule in Portugal?

Under simplified regime, AT assumes 25% of your gross receipts represent business expenses. To use this full allowance, you must have documented at least 15% of your annual gross receipts as actual expenses. If you can't, the undocumented portion gets added back to your taxable income. For a freelancer earning €40,000, that means having at least €6,000 in documented expenses.

What counts as a deductible expense for freelancers in Portugal?

For the purposes of the 15% rule, qualifying expenses include: professional services purchased (accountant, lawyer), rent for a workspace, equipment, software subscriptions, professional training, and other costs directly related to your activity. Personal expenses don't count. The expense must appear on an AT-registered invoice (fatura) linked to your NIF.

What is eFatura and why does it matter?

eFatura is AT's system for tracking invoices. Every time a supplier issues you a fatura (invoice) with your NIF, it shows up in your eFatura account on the Portal das Finanças. AT uses this data to pre-populate parts of your IRS declaration and to verify your expense claims. Reviewing your eFatura statement before filing is the fastest way to confirm your documented expenses for the year.

What is the simplified regime coefficient (coeficiente simplificado)?

The coefficient is the fraction of your gross income that AT treats as taxable. For service providers (Category B, CIRS article 151 activities), the coefficient is 0.75, meaning 75% of receipts are taxable. For sales of goods, the coefficient is 0.15. This coefficient is why simplified regime often makes more sense than organised accounting for service freelancers.

What are Deduções Específicas (specific deductions) for Category B income?

Specific deductions (Deduções Específicas) for Category B reduce your taxable income before the IRS brackets are applied. For simplified regime, the main deduction is mandatory Social Security contributions. You can also deduct compulsory professional fees (e.g., professional association dues). These are distinct from the 15% expense documentation requirement.

Should I switch to organised accounting (contabilidade organizada) to deduct more expenses?

Switching to organised accounting lets you deduct actual business expenses rather than relying on the fixed coefficient. It makes sense when your actual documented expenses exceed 25% of gross receipts AND you earn above the threshold where the savings outweigh accountancy costs (typically around €30,000–50,000/year depending on your cost structure). Below that, simplified regime is usually more tax-efficient.

Expenses

Expenses for Freelancers in Portugal: The Complete Hub

How expenses work under Portugal's simplified regime: the 15% documentation rule, simplified regime coefficients, eFatura, and what counts as a deductible expense.

Last updated: 2026-05-30

Under Portugal's simplified regime, expenses work differently than most freelancers expect, and getting this wrong is one of the most common reasons people end up with a surprise tax bill.

This page maps everything about expenses: the 15% documentation rule, how coefficients work, what eFatura does, and when it might make sense to move to organised accounting.

The fundamentals

Simplified regime doesn't let you itemise and deduct individual business expenses. Instead, AT applies a fixed coefficient (coeficiente simplificado) to your gross receipts. For most service providers, the coefficient is 0.75, meaning 75% of what you bill is treated as taxable income. The remaining 25% is your implied expense allowance.

There's a catch: to use that full 25% expense allowance, you must have documented at least 15% of your annual gross receipts as actual expenses. These expenses need to appear as invoices (faturas) in AT's eFatura system, linked to your NIF. If you fall short (say you only have 8% documented), AT adds back the gap to your taxable income.

What qualifies? Costs directly related to your professional activity: software subscriptions, equipment, professional training, accountant fees, office rent, and similar items where the seller has issued an invoice in your name with your NIF. Personal expenses don't count.

Foreign supplier invoices (Stripe, AWS, Adobe, and similar) are not auto-captured by e-Fatura, but they still count toward the 15% if you register them manually on the e-Fatura portal as the acquiring party (registar fatura as adquirente), or declare them in Anexo B Quadro 17 of your IRS Modelo 3. Keep originals and payment proof for 10 years (Art. 52 CIVA).

The eFatura portal on Portal das Finanças is where you review what AT has already captured. Suppliers who issue you invoices with your NIF feed into this system automatically. Reviewing it before you file your IRS saves time and catches any missing documents.

Start here

Track and manage your expenses so they count toward the 15% threshold:

Expense Tracking: manage your deductible expenses →

Reference material

Fact pages:

The 15% Expense Documentation Rule 2026: what the rule is, how the calculation works, and examples at different income levels
Simplified Regime Coefficients 2026: the coefficient for each activity type and how to find which one applies to you

Glossary terms:

eFatura: AT's invoice-tracking system and how it feeds into your IRS declaration
Categoria B (Category B income): the income category covering self-employment and freelance work
Coeficiente Simplificado: how the taxable income multiplier works under simplified regime
Deduções Específicas: specific deductions that reduce Category B taxable income before brackets apply

Expense Tracking: upload expense photos, extract the data, track your documented expenses for the year
Tax Calculator: model your overall tax position including how documented expenses affect your IRS bill
IRS Filing Hub: everything about filing your annual declaration, including how Anexo B handles simplified regime

Related terms

e-Fatura

Portugal's electronic invoice system that automatically tracks purchases linked to your NIF. Used for tax deductions: if your NIF isn't on the receipt, the expense doesn't exist for tax purposes.

Categoria B

The IRS income category for self-employment income in Portugal. Covers freelancers, sole traders, and independent professionals. Declared in Anexo B of the Modelo 3 IRS return.

Coeficiente do Regime Simplificado

The multiplier that determines how much of your gross income is taxable under the IRS simplified regime. For professional services it's 0.75, meaning 75% of gross is taxable and 25% is deemed business costs.

Deduções Específicas

IRS deductions applied to each income category before tax rates are calculated. For Category B (self-employment), the simplified regime's deemed cost coefficient acts as the specific deduction. For Category A employees, there's a fixed deduction of €4,462 or actual mandatory contributions if higher.

The fundamentals

Start here

Reference material

Related tools

Related terms