On 20 October 2026, President of the Republic Marcelo Rebelo de Sousa promulgated Law 45/2026, which introduces targeted amendments to the Personal Income Tax Code (CIRS). The law, approved by Parliament on 30 September, includes three main changes: (1) extension of the youth IRS exemption (IRS Jovem) to age 35 for PhD holders; (2) clarification of the tax treatment of stock options granted by non-resident employers, aligning with OECD guidelines; and (3) adjustment of the withholding tax tables for pension income to reflect the 2026 rate reduction. The law enters into force on 1 November 2026, with most provisions applicable to the 2026 tax year.
Key Takeaways
- Youth Extension: PhD graduates now benefit from the 50% exemption on employment income (capped at €12,500) until age 35, up from 30.
- Stock Options: Taxation occurs at exercise, with the gain computed as the difference between market value and strike price; foreign plans qualify for treaty relief.
- Pension Withholding: Updated tables reduce monthly withholding for pensioners, improving cash flow without changing annual liability.
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