The changes introduced in categories E (capital income) and G (patrimonial increases) are essentially characterized by the clarification of the classification of certain types of income, as well as the reclassification of income, traditionally classified as capital income within category G ( capital gains).

Therefore, the following (among others) are qualified as capital income:

  • Remuneration  of  securities  accounts  with  guaranteed  price  and  of  similar transactions;
  • Distributed profits and reserves, even where the distributing entity is not subject to Portuguese CIT;
  • Income from units in investment funds;
  • Indemnities aimed at compensating loss of category E income; and
  • Amounts paid or made available by fiduciary structures (except amounts paid upon settlement, revocation or termination, or amounts previously subject to special imputation).

On the other hand, the following types of income are removed from category E, and reclassified as capital gains:

  • Amounts paid upon settlement, revocation or termination of fiduciary structures when paid to the taxpayers who constituted them;
  • Gains arising from the refund of bonds and other debt securities;
  • Gains arising from the redemption of units in investment funds, as well as from their settlement;
  • Gains arising from the onerous transfer of credits, ancillary and /or supplementary contributions; and
  • Exchange swaps, interest rate and currency swaps and foreign exchange forward transactions.

Long term savings incentives

Remuneration from deposits, investments in financial institutions or from government securities, whose capital is invested for a minimum period of 5 years and whose maturity occurs by the end of such period, are capable of benefiting from the tax exemption regime applicable to life insurance products.

Economic double taxation

Ability to apply for PIT purposes the CIT regime for the elimination of economic double taxation to profits distributed by resident companies of a Member State of the European Economic Area bound to administrative cooperation in the field of taxation equivalent to the one established within the European Union.

Exchange of current for future assets

Specific provision according to which the tax event for taxation purposes occurs upon the execution of the agreement under which the future asset is acquired, or  upon  its effective delivery (if earlier).


Adoption of specific provisions on the quantification of income of autonomous warrants, by distinguishing the applicable regime upon their purchase, sale and transfer, mainly aimed at allowing that the exercise price be corrected from the subscription premium (acquisition by subscription) or from the acquisition value (acquisition by transfer).

Assignment of credit, ancillary and/or supplementary contributions

Clarification that the taxable gain is determined by reference to the assignment value deducted from the nominal value of the respective credits (for the first assignment) or from its acquisition value (for subsequent assignments).

Fiduciary structures

For the purposes of determining the taxable value upon settlement, revocation and/or termination of fiduciary structures, and to the extent that the taxable value is assessed by reference to acquisition and realization values, it is necessary to take into account the value of the assets delivered by the taxpayer upon incorporation of the fiduciary structure as acquisition value, corresponding the realization value to the value received upon its settlement, revocation and/or termination (deducted from values subject to special imputation that have not yet been distributed).

Corporate restructurings

Standardisation of rules applicable within CIT neutral mergers, divisions and exchange of shares for the purposes of PIT tax exemptions and for the compliance of the respective ancillary obligations.

Capital gains: reference values and deductible expenses

Approval of a specific provision allowing the taxpaye r to demonstrate that the realization/sale value of real estate transfers is lower than the respective taxable value.

Ability to update shares’ acquisition value through the use of currency devaluation coefficients, as well as to deduct costs related to their acquisition (and not only to their transfer). The same tax deduction is introduced for onerous transfer of intellectual and industrial property, and onerous transfers of acquired experience in commercial, industrial or scientific areas, whenever the transferor is not the original holder.

Extension of the reference period for the purposes of deduction of the expenses incurred with the valorisation of real estate from 5 to 12 years, and provision of the possibility to deduct the amounts paid for the onerous waiver of rights related to real estate.

Exit tax

Subject to tax provision aimed at ensuring the taxation of capital gains obtained as result of the transfer of tax residence from Portugal in respect of shares received in exchange of a contribution of assets for the realization of share capital, as well as shares obtained as a result of CIT neutral mergers, divisions and transfer of shares.

Similarly to the regime introduced for CIT purposes, it is also foreseen for PIT purposes the possibility of immediate payment, payment in 5 annual instalments or deferral of payment to the time of realization.

Personal and permanent dwelling: tax exemption

The reinvestment regime in the 24 months prior to sale can now be made by means of construction, expansion or improvement  of an existing  real estate  asset exclusively aimed for personal and permanent dwelling (not being limited to new real estate acquisitions). In cases of reinvestment by means of new acquisitions the term for the allocation of the real estate asset to personal and permanent dwelling of the taxpayer is increased from 6 to 12 months, being such term counted from the realization of the reinvestment.

In the remaining cases the prescribed term for reinvestment shall be of 48 months, counting from the sale of the real estate asset, for the purposes of registering the real estate acquisition or the improvements introduced to an existing real estate asset at the tax authorities, being applicable a 5-year term for the purpose of allocating the new or refurbished real estate asset to personal and permanent dwelling (counted from the sale year).

For agreements entered into until December 31, 2014, and for the sales of real estate made between 2015 and 2020, the capital gains exemption can also be applicable if the sale value is applied in the amortization of the loan taken for its acquisition and, on the date of transfer, the taxpayer does not own another immovable property for residential purposes.


Standardisation of the rate applicable to capital income earned by residents and non- residents which is set at 28%.

Regarding capital gains arising from the reimbursement of bonds and other debt securities, from the redemption of units in investment funds or from their settlement, when related to securities whose issuer is tax resident in a country, territory or region subject to a more beneficial tax regime (included in a list published by the Ministry of Finance) an increased rate of 35%, identical to the one applicable to capital income, is applicable, being the same rate applicable to the gains that arise from settlement of fiduciary structures located in such territories.