Year-End Tax Planning for Portugal Residents 2022

As 2022 draws to a close, Portuguese residents should review their tax position and plan for the coming year.

NHR Holders

If you’re under the Non-Habitual Resident regime:

Foreign Income Planning

• Review sources of foreign income
• Ensure proper documentation for exemption claims
• Consider timing of dividend distributions
• Review treaty positions for different income types

Employment Income

• Verify high-value activity classification if claiming 20% rate
• Document professional activities appropriately

General Tax Planning

Deductions Available

Portuguese residents can deduct (within limits):

• Healthcare expenses: Medical bills, insurance premiums
• Education costs: School fees, tuition
• Property expenses: Mortgage interest, certain maintenance
• VAT recovery: Request invoices with NIF for eligible purchases

Pension Contributions

• Review maximum deductible PPR (retirement savings) contributions
• Consider making contributions before year-end

Investment Considerations

Capital Gains Timing

• Review unrealized gains and losses
• Consider harvesting losses to offset gains
• Timing of sales can affect which tax year applies

Rental Property

• Ensure all income properly reported
• Document deductible expenses
• Consider property regime (simplified vs organized accounting)

Looking Ahead

• Gather documentation throughout the year
• Maintain organized records
• Consider professional tax advice for complex situations
• Monitor legislative changes affecting next year’s planning

Proactive tax planning can significantly reduce liability while ensuring full compliance with Portuguese law.