On March 27, 2026, the Council of Ministers approved a decree-law introducing a relevant change regarding personal income tax (IRS) compliance: taxpayers covered by the IRS Jovem regime are now eligible for the Automatic IRS. This measure aims to simplify administrative procedures and facilitate tax compliance, specifically focusing on the younger population.
1. IRS and the "IRS Jovem" Regime IRS is a direct and progressive tax on the annual income of individuals. In Portugal, the submission of the IRS return (Model 3) takes place annually between April 1 and June 30.
The IRS Jovem is a tax regime designed to reduce the tax burden on employment income for young people up to age 35, applying partial exemptions during the first years of professional activity. For 2026, the exemption applies to income up to 55 times the Social Support Index (IAS), totaling €29,542.15. Up to this limit, the following exemption percentages apply based on the years of income obtained after completing a cycle of studies:
1st year: 100% exemption
2nd to 4th year: 75% exemption
5th to 7th year: 50% exemption
8th to 10th year: 25% exemption Any income exceeding this limit remains fully subject to general IRS taxation rules.
2. Automatic IRS Expansion The Automatic IRS is a mechanism provided by the Tax Authority that offers a pre-filled tax return, exempting the taxpayer from full manual entry. Until now, IRS Jovem beneficiaries were generally excluded from this mechanism. With the approval on March 27, 2026, these taxpayers can now access a pre-filled declaration subject to their confirmation.
3. Validation Procedure Taxpayers can access their automatic return through the Finance Portal (Portal das Finanças) and must verify the information, specifically:
Declared income;
Expenses and tax deductions;
Household composition.
If the taxpayer does not confirm or alter the declaration, it will be considered automatically submitted at the end of the legal deadline on June 30.
VPA – Sociedade de Advogados provides specialized legal support in this area, assisting in the interpretation and application of these recent changes. Individualized assessment is essential to ensure correct tax filing and to optimize the taxpayer's position.
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