Decree-Law no. 13_2025, of March 6th
It amends the Personal Income Tax Code, eliminating reporting obligations in the tax return and clarifying these obligations with regard to assets held in countries, territories or regions with a clearly more favorable tax regime.
The current wording of Article 57(7) of the Personal Income Tax Code (IRS Code), approved by Decree-Law 442-A/88, of November 30, in its current wording, introduced by Law 82/2023, of December 29, approved the State Budget for 2024.º 82/2023, of December 29, which approved the State Budget for 2024, created the obligation to report, in the income tax return for IRS purposes, income subject to non-inclusive rates and income not subject to IRS, when it exceeds 500 euros, as well as assets held in countries, territories or regions with a clearly more favorable tax regime.
However, the declaration of income subject to non-inclusive rates and income not subject to IRS is of no relevance for the purposes of assessing IRS.
Furthermore, this obligation implies a duplication of information that the Tax and Customs Authority (AT) already has, as it is communicated to it, under the terms of article 119 of the IRS Code, through the tax substitutes' declarations, which cover both income subject to tax-free rates and non-taxable income, such as meal allowances and subsistence allowances included in the monthly remuneration declaration.
Consequently, this provision results in an increase in complexity, compliance costs for taxpayers and administrative costs for the AT, without any effective gain or benefit for the control and monitoring of taxpayers' tax situation.
