Portugal now offers a tax regime specially designed for young workers—including expats arriving in the country—called IRS Jovem (Youth IRS). This regime, recreated to be more inclusive and advantageous, represents a significant opportunity for tax savings during the first years of a career.
What is IRS Jovem?
IRS Jovem is a tax regime that grants successive IRS exemptions on employment income (Category A) and/or self-employment income (Category B), for up to 10 years. The exemption percentages are progressive, decreasing over time:
1st year: 100% exemption
2nd–4th years: 75% exemption
5th–7th years: 50% exemption
8th–10th years: 25% exemption
AnchorLess
Who can benefit?
To be eligible, you must meet the following criteria:
- Be up to 35 years old at the end of the tax year.
- Not be considered a dependent—i.e., file an independent IRS declaration.
- Not have previously benefited from regimes such as NHR (Non-Habitual Resident), IFICI, or the Programa Regressar (Return Program).AnchorLessportugal-accountingPortutax
Real savings: how it works in practice
The exemption applies up to a limit of 55 IAS (Indexante dos Apoios Sociais – Social Support Index)—approximately €28,737.50 per year, based on the IAS value in 2025.
AnchorLessPortutax
Savings example (gross monthly salary of €1,000, 14 months/year):
| Period | % exempt | Estimated annual saving |
| 1st year | 100% | €812 |
| 2nd–4th years | 75% | €1,827 |
| 5th–7th years | 50% | €1,218 |
| 8th–10th years | 25% | €609 |
| Total (10 years) | — | €4,466 |
| AnchorLess |
This represents concrete financial support in the first years of professional life, ideal for those starting out or building a financial foundation.
How to apply?
You have two practical ways to benefit from the regime:
- Through the employer (Category A): you can request that the exemption be reflected in the monthly withholding tax. You’ll feel more liquidity in your pocket right away—but with a smaller annual refund.AnchorLess
- In the annual declaration: especially useful for self-employed workers, or if you prefer to receive the benefit as a refund in the IRS.AnchorLess
Why is it attractive to expats?
- Increases disposable income during the start of a career.
- Promotes financial independence and encourages tax residency in Portugal.
- It is an exclusive benefit for tax residents without a previous history in these regimes, ideal for new expats.
- Reinforces Portugal as an attractive destination—not just for the quality of life, but also for the financial liquidity it provides in the early years.AnchorLess
Conclusion
The IRS Jovem is an excellent fiscal entry point for young professionals and expats in Portugal. With up to 10 years of partial IRS exemption and a significant annual limit on eligible income, it represents an opportunity for real relief in monthly and annual income.
At FA Accounting, we work with expats to assess whether they qualify for this regime, help them request the discount on withholding tax, or prepare them for the annual declaration. If you want to simplify your transition to Portugal with optimized tax planning, talk to us!
Did you like this article? Share it with friends and family so everyone can benefit from this regime in Portugal!