Regime Simplificado
Regime Simplificado de Tributação · Simplified Tax Regime
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Portugal's simplified IRS regime for self-employed individuals, where taxable income is calculated using fixed coefficients applied to gross revenue. Companies have a separate simplified regime under IRC.
If you register as a freelancer in Portugal, this is the tax regime you'll land on by default. The full name is regime simplificado de tributação (simplified taxation regime), and the "simplified" part is not just branding. It means the tax authority doesn't expect you to keep full accounting books.
How the coefficients work
Instead of calculating your profit from detailed records of income minus expenses, the simplified regime uses fixed coefficients. The tax authority takes your gross revenue and multiplies it by a coefficient to get your taxable income.
For the professions listed in the Art. 151.º CIRS table (IT professionals, consultants, architects, engineers and the others on the list), the tax authority assumes 25% of your income goes to expenses and taxes you on the remaining 75%. Earn 40,000 euros in a year, and the tax authority treats 30,000 euros as taxable income. The other 10,000 is the assumed expense deduction.
Different activities have different assumed expense rates. Services that aren't on the Art. 151.º list are taxed on 35%. Sales of goods assume 85% expenses (only 15% taxable). Local accommodation (alojamento local) in a house or apartment outside a containment zone assumes 65% expenses (35% taxable); other kinds of accommodation have their own coefficients.
Your taxable income then goes through Portugal's progressive IRS tax brackets like any other income.
The 15% you need to prove
For services taxed on 75% or 35%, the assumed deduction isn't entirely free. Art. 31.º n.º 13 CIRS checks that you can point to at least 15% of that gross service income. If you don't reach it, the shortfall gets added to your taxable income. Goods income, and restaurant and hotel-type services, are outside this test.
On 40,000 euros of service income, that means 6,000 euros. What counts: an automatic specific deduction of about 4587,09 € (2026), or your mandatory Social Security contributions if those are higher (counted only up to 10% of your gross), plus your documented business expenses. So if your service income is under roughly €30,580, the specific deduction alone covers it and you may not need to present any documented expenses at all.
Documented expenses are, by default, the invoices with your NIF in the e-fatura system that you classify as professional. You can instead declare your own totals in Anexo B, Quadro 17C, which then replace the tax authority's figure. Staff costs and purchases from other EU countries count too.
Foreign supplier invoices don't appear in e-Fatura. The route for registering an invoice there yourself is built for Portuguese invoices (it needs the QR code or ATCUD), so don't rely on it, and even a registered foreign invoice would not meet the rule for other expenses, which requires invoices communicated to AT. Purchases from a supplier in another EU country, and goods imported from outside the EU, are declared in Anexo B, Quadro 17A, campo 17002, and count toward the 15%. Whether a service bought directly from a supplier outside the EU counts is still an open question. Keep the originals and payment proof for 10 years (Art. 52 CIVA).
First-year discount
When you start a new activity, the tax benefit is significantly larger. In the tax year you start, the coefficient for services is cut in half: for an Art. 151.º profession, only 37.5% of your service income is taxable. In the following tax year, the cut is 25%, so 56.25%. From then on, you're at the standard 75%. Other services get the same cuts; sales of goods get none.
One detail most people miss: it's per tax year, which is the calendar year, not your first 12 months. If you open your activity in November, you only get the 50% cut for two months of income. If you can time it, starting your activity early in the year gives you the full benefit.
To qualify for the first-year discount, you can't have employment income or pension income in that year, and you can't have closed any activity in the last 5 years.
Who it's for (and who outgrows it)
The simplified regime is for solo entrepreneurs whose Category B income doesn't exceed 200 000,00 € per year. Below that threshold, the math is straightforward and the administrative burden is light: issue Recibos Verdes, classify your expense invoices, file your quarterly Social Security declaration once contributions start, and file your annual IRS return.
It stops making sense in two situations. First, if your actual business expenses significantly exceed what the coefficient assumes. A developer who spends 40% of revenue on subcontractors and tools is being taxed as if expenses are only 25%. Second, if your revenue is climbing past the 200 000,00 € threshold. Crossing it once doesn't end the regime: it ends only if you exceed the limit in two consecutive years, or in a single year by more than 25%, and organized accounting then starts the following year (Art. 28.º n.º 6 CIRS).
At that point, you'd switch to contabilidade organizada, hire a certified accountant, and start deducting real expenses. It's more work, but the tax math might favor you.
For most freelancers and solo entrepreneurs starting out in Portugal, the simplified regime is the right place to be. It's simple in the way the name promises.
See the numbers
Use the tax calculator to estimate your income tax and Social Security contributions for your first three years on the simplified regime.
Perguntas frequentes
What is the revenue limit for the simplified regime in Portugal?
The simplified regime applies while your Category B income in the previous year doesn't exceed 200 000 €. Going over it once doesn't end the regime. It ends only if you exceed the limit in two consecutive years, or in a single year by more than 25%, and organized accounting (contabilidade organizada) then starts the following year (Art. 28.º n.º 6 CIRS).
How does the simplified regime calculate my taxable income?
The tax authority assumes a fixed portion of your income goes to business expenses. For the professions listed in the Art. 151.º CIRS table, only 75% of your income is taxed; for other services, 35%. You don't need receipts for every purchase. For services taxed on those two coefficients, though, you need to reach 15% of your gross service income through the specific deduction or your Social Security, plus documented expenses. If you fall short, the gap gets added back to your taxable income.
Do I need an accountant on the simplified regime?
Not legally, no. That's one of its main benefits. You don't need to keep organized accounting books or hire a certified accountant (CC). You issue Recibos Verdes, track your income, and file your annual IRS return. Many people do it themselves.
Can I deduct actual business expenses on the simplified regime?
Not in the traditional sense: you can't subtract expenses from income like in organized accounting. The coefficient gives you the deduction instead. For services taxed on 75% or 35%, you must reach 15% of your gross service income with the larger of the automatic specific deduction (4587 € (2026)) or your Social Security contributions (counted up to 10% of gross), plus your documented expenses: invoices with your NIF in e-fatura classified as professional, or the totals you declare yourself in Anexo B. If your service income is under about €30,580, the specific deduction alone covers it.
Do I get a tax discount in my first years of activity?
Yes. In the tax year you start, the coefficient for services is cut by half: for an Art. 151.º profession, only 37.5% of your service income is taxable. In the following tax year, the cut is 25%, so 56.25%. After that, you're at the standard coefficient. Sales of goods get no cut. The tax year is the calendar year, not your first 12 months: if you open your activity in November, you only get the 50% cut for two months. To qualify, you can't have employment or pension income in that year, and you can't have closed any activity in the last 5 years.
What happens if I switch from simplified to organized accounting?
You'll need to hire a certified accountant and maintain proper bookkeeping. You can deduct actual expenses against revenue, which may result in lower taxes if your real costs exceed what the coefficient assumes. Choosing it can make sense once your real expenses are high.
Termos relacionados
The Portuguese term for an independent worker or sole entrepreneur, the equivalent of a freelancer or sole trader in other countries.
Recibo VerdeGreen ReceiptA combined invoice-receipt (fatura-recibo) issued by solo entrepreneurs in Portugal through the Portal das Finanças when they receive payment for services.
NIFNúmero de Identificação Fiscal · Tax NumberPortugal's 9-digit tax identification number, required for every tax-related interaction from opening a bank account to issuing an invoice.