What changes in taxes in 2025?
By 2025, the government decided to keep the rates of most taxes unchanged, while at the municipal level, it increased the number of municipalities applying the minimum IMI rate or making small reductions compared to the 2024 value.
These are the main tax changes for 2025.
Discover the main tax changes in 2025, impacting your income, disclosed by Notícias ao Minuto.
IRS: Changes to increase net income in 2025.
Income tax for individuals will undergo several changes starting in January 2025, resulting in an increase in net income both in January and at the time of the annual declaration.
Among the changes are:
- The update of the tax brackets limits by 4.6%.
- The increase in the tax-free threshold for IRS to 12,180 euros, matching the rise in the National Minimum Wage (NMW).
- The increase of the specific deduction to 4,462.15 euros;
- The increase in the limit of the deduction for housing rents, which rises from 600 to 700 euros.
The new Young IRS model also comes into effect in January, being more comprehensive and advantageous than the previous one. This regime is valid for 10 years (up to 35 years old) and applies to gross annual incomes up to 55 times the Indexante dos Apoios Sociais (IAS). Despite the improvements, critics of the measure claim that it will not be enough to prevent the exit of young people from the country.
In addition, in 2025:
- Independent workers (green receipts) will have a reduction in the withholding tax rate, which goes from 25% to 23%.
- All taxpayers can allocate up to 1% of their IRS to cultural, youth, or sports entities.
Meal allowance: New exempt limits for 2025
Regarding IRS, the amount of meal subsidies exempt from tax and contributions, when paid on a card or vouchers, increases to 10.20 euros (plus 60 cents). For amounts paid in cash, the exemption limit remains at six euros.
IMT: Updating the tax brackets in line with the IRS.
Just like in IRS, the exempt limits and values subject to marginal rates of IMT will be updated by 4.6%, also applying to the IMT Young model.
IMI: More municipalities opt for the minimum rate.
More than half of the municipalities will apply the minimum rate of 0.3% of IMI in 2025 (for the 2024 tax). Among the municipalities that have decided on this rate are Lisbon, Oeiras, Sintra, Albufeira, and Faro.
Most municipalities will continue to offer discounts on property tax (IMI) to families with dependents.
ISP: Adjustment in the composition of the fuel tax.
The unit rates of the ISP (Tax on Petroleum Products) on a liter of gasoline and diesel will increase by about three cents in January, offsetting the decrease in the carbon tax by the same amount. The Government guarantees that the total amount of ISP borne by consumers will not be changed, only the composition of the tax will be adjusted.
The goal is to gradually remove the extraordinary measures implemented in 2022 and 2023 to mitigate the rise in fuel prices, in accordance with the requirements of the European Commission.
Vehicle taxation: New rules and reduction in VAT
From 2025 onwards, discount tables for the ISV (Vehicle Tax) for imported used cars will be unified. Instead of separate tables for engine displacement and CO2 emissions, there will be a single table for the total tax. As a result, the ISV will decrease overall, especially for vehicles with higher emissions.
Furthermore:
- There will be no update in the rates of the IUC (Single Circulation Tax).
- Autonomous taxation rates on vehicles for companies and individual entrepreneurs will also be reduced.
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