Portugal answers, taxes
What is IRS Jovem and can foreigners under 35 use it?
IRS Jovem is Portugal's youth income tax break, and the version that matters is the model in force since 1 January 2025. It is much wider than the one people remember from a few years ago, and nothing in it turns on where your passport was issued.
How the exemption tapers
| Year of use | Share of earned income exempt |
|---|---|
| Year 1 | 100 percent |
| Years 2 to 4 | 75 percent |
| Years 5 to 7 | 50 percent |
| Years 8 to 10 | 25 percent |
The exempt amount is capped at 55 times the IAS. The IAS for 2026 is 537.13 euros, which puts the 2026 ceiling at 29,542.15 euros of exempt income. Anything above it is taxed normally, through the ordinary 2026 brackets that run from 12.5 percent to 48 percent.
Who qualifies
- You are a Portuguese tax resident. That is the condition that matters, and it is the same 183 day and habitual home test that applies to everyone else.
- You are 35 or under. The 2025 model raised the ceiling and dropped the old requirement to hold a specific level of qualification, so there is no degree test any more.
- You are not benefiting from NHR, from IFICI, or from Programa Regressar under Article 12-A of the IRS code. These are alternatives, not stackable.
It applies to earned income, meaning employment in Category A and self-employment in Category B. Pensions, rent and investment income stay outside it.
Why it matters more than it looks
A freelancer in their first year already gets the simplified regime treatment on top, so the combination can take an early career tax bill close to nothing. For a young remote worker choosing between regimes, IRS Jovem is usually the realistic option, because IFICI needs a qualifying Portuguese employer or activity that most people working for a foreign company simply do not have.
Before you count on it
The ten years are years of use rather than a calendar block, and the exclusions are checked against your own tax record, so a year of NHR in the past can close the door. Run your own figure in the Portugal tax estimator, then confirm the year count with a contabilista when you file your first Modelo 3. This is not tax advice, and the rules are dated: they are the ones in force for the 2026 tax year.
Sources
- gov.pt, novo modelo de IRS Jovem em 2025, age limit 35, ten years, 100 to 25 percent taper, cap of 55 times the IAS, no qualification requirement, exclusions for NHR, IFICI and Programa Regressar, accessed .
- Fed Finance, IRS Jovem 2026, IAS of 537.13 euros for 2026 and an exemption cap of 29,542.15 euros, accessed .
- PwC Worldwide Tax Summaries, Portugal taxes on personal income, 2026 brackets from 12.5 percent to 48 percent under Lei 73-A/2025, accessed .
Facts in this answer last verified .
Read the full guide
- Freelancer tax in Portugal in 2026: recibos verdes, IRS, VAT and social security
Freelancers in Portugal pay IRS on 75 percent of receipts, 21.4 percent social security on 70 percent, and VAT above 15,000 euros. The 2026 rules, worked.