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 specific deduction (~4587,09 € (2026)). This is automatic. No receipts required, no action needed. It's a floor, not an add-on.
2. Social Security contributions, capped at 10% of your gross services income (Art. 31 nº13 a) CIRS). Your quarterly SS payments count toward the 15%, but only up to that cap, not 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.

The specific deduction and the capped Social Security leg don't stack, AT takes whichever of the two is larger.

Who actually hits the shortfall

Because Social Security only ever counts up to 10% of gross while the threshold is 15%, the automatic coverage alone stops fully closing the gap once your income clears roughly €30,580. Below that, the fixed specific deduction covers the whole 15% on its own. (€45,871 is a different and later point: it is merely where the capped Social Security leg overtakes the fixed deduction, by which time a shortfall has existed for some time.) Three groups face the largest gaps:

First-year freelancers not yet enrolled in SS. A first-ever registration is not enrolled in the regime until the first day of the 12th month after the start date. With no SS contributions at all, the only automatic coverage is the specific deduction, covering the threshold up to roughly €30,580 of gross income. Above that, you need documented supplier invoices.

Freelancers whose Social Security is already capped at 10% of gross. This happens at almost any income above the break-even, adjustment or not: your actual SS bill is normally around 14.98% of gross, well above the 10% ceiling, so the capped figure, not your real contribution, is what counts.

High earners. Two distinct thresholds sit here and they are often conflated. The Social Security contribution base is capped at 12 x IAS per month, which your gross reaches at roughly €110,495; from there your annual SS bill plateaus at around €16,550. It is only above roughly €165,500 that this plateau falls below 10% of gross, so the automatic leg stops tracking your income at all. The 15% threshold keeps rising while the automatic leg stays flat at that plateau. At €200,000 gross, the 15% threshold is €30,000 but the automatic leg tops out around €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.