On 28 October 2026, the Portuguese Parliament approved an amendment to the 2027 State Budget proposal increasing the specific IRS deduction for households with three or more dependents. The measure, supported by a cross-party majority, raises the annual deduction per dependent from €600 to €850 for the third and subsequent children. This targeted relief aims to counteract demographic decline and support larger families facing elevated living costs. The change will take effect for the 2027 tax year, with taxpayers claiming the enhanced deduction on returns filed in 2028.
Key Takeaways
- Enhanced Deduction: Families with three children gain an additional €750 annually (€250 extra per child for the third and beyond), rising to €1,000 for four children.
- Demographic Policy: The measure complements existing family allowances and childcare subsidies, forming part of a pronatalist package.
- Budget Impact: Estimated cost of €45 million annually, financed through reallocation within the social security budget.
Disclaimer: This article is compiled and summarized by the AI based on publicly available information and is for general information purposes only. It does not constitute any form of formal tax advice, legal opinion, or basis for performance. Please consult a qualified professional tax advisor or legal counsel for tax advice.
Source: Read Official Announcement