Not so long ago, the only clear tax exclusion provided by the Portuguese Personal Income Tax Code applied to certain financial products that many people hold in Portugal - namely, life insurance and unit-linked life insurance policies.
Just as a side note, we have several articles and webinars about these products on our blog, so if you are interested, you can check them there.
Here, we’re not talking about proceeds paid to beneficiaries, but rather about the early withdrawal of funds once invested.
Now, it seems the Portuguese market is aiming to become even more attractive to both local and foreign investors, as a brand-new tax provision has been added to the law. This provision introduces an exclusion for a substantial portion of gains from securities - meaning you may avoid paying tax on a significant percentage of your gains if you follow the rules.
This new exclusion bears some similarity to the distinction between ordinary and qualified gains in the U.S., where only long-term gains benefit from lower tax rates.
Here’s a quick overview of the Portuguese exclusion for your gains:
| Exclusion % | Holding period Rule |
| 10%of the taxable gains | Asset held for > 2 years and < 5 years |
| 20%of the taxable gains | Asset held for > 5 years and < 8 years |
| 30%of the taxable gains | Asset held for > 8 years |
All taxable gains are generally subject to a flat rate of 28%, with the option to aggregate them under progressive rates.
For those benefiting from the NHR or TISRI regimes, capital gains from a foreign source are already excluded from taxation. However, this new provision is worth considering for long-term tax planning if you plan to live in Portugal beyond the period of those benefits.
Although the time required to reach the highest exemption is undeniably long, this new provision sends a clear signal: Portugal is positioning itself as a home for investors. The intent aligns with the broader direction the country is taking toward financial growth - a direction we can also see in the progressive provisions regarding crypto gains, which are entirely exempt from taxation if held for more than a year, regardless of other tax benefits.
In short, this is the start of something new - a move that could help soften the impact of Portugal’s high tax brackets and make life here even more appealing after the NHR and TISRI periods end.
