Portugal: Procedures to be adopted in view of updating the withholding tax tables applicable in 2023
Due to the update of the withholding tables applicable to employment income (category A) and pensions (category H), received by residents in mainland Portugal, for the first and second semesters of 2023, the procedures to be adopted by the paying entities of such income have now been disclosed by the Personal Income Tax Services (DSIRS), as set out in the Administrative Information no. 1/2023, of 11/01 and Administrative Information no. 2/2023, of 11/01, respectively.
The following instructions are included in the first Circular: (i) it is mandatory for the paying entities to include the effective monthly withholding rate in the income receipt; (ii) the possibility of withholding tax on category A income being reduced to the rate of the tax bracket immediately below that corresponding to the monthly remuneration and applicable family situation, provided that certain conditions are met; and (iii) a reduction in the withholding rate to be applied to remuneration for additional work.