In 2025, tax residents in Madeira, or anywhere in Portugal, must legally report their worldwide income to the Portuguese Tax Authority (Autoridade Tributária e Aduaneira). This duty applies regardless of the source or location of the revenue. It is based on international transparency standards, including Portugal’s participation in the automatic exchange of financial information under the OECD Common Reporting Standard (CRS) and various double taxation treaties.
What Must Be Declared
As a Portuguese tax resident, you are required to disclose annually, among others:
- Employment income (Category A): wages, salaries, bonuses, etc.;
- Self-employment or professional income (Category B): business activities, freelance work;
- Investment income (Category E): interest, dividends, royalties;
- Real estate income (Category F): rental income, subletting income;
- Capital gains (Category G): from the sale of assets, securities, or property;
- Pension income (Category H): including private and public pensions received abroad;
- Foreign bank accounts: all non-Portuguese bank accounts must be reported using the corresponding IBAN or equivalent account identifier.
For each income category, residents must also disclose the jurisdiction of origin, any foreign taxes withheld, and, where applicable, social security contributions paid abroad. This information enables the Portuguese authorities to cross-reference foreign-sourced income with data received from partner jurisdictions and to prevent double taxation where relief is legally due.
Key Deadlines for 2025
The reporting window for the 2024 tax year opens on April 1, 2025 and closes on June 30, 2025. During this period, all tax residents must submit their annual tax return (Modelo 3), including all required annexes such as Annex J for foreign income and bank accounts.
If the taxpayer is a company or self-employed individual, the corporate income tax return (Modelo 22) must be filed by May 31, 2025. Separately, the Annual Simplified Business Information (IES/DA), which includes accounting data, must be submitted by July 15, 2025. If any tax is due based on the return, the payment is typically expected by August 31, 2025, although the Tax Authority will communicate the exact deadline upon assessment.
Automatic Exchange of Information
Portugal is part of a global network of tax cooperation. Under the OECD’s Common Reporting Standard (CRS) and numerous bilateral treaties, financial institutions in over 100 jurisdictions report account balances, investment income, and other economic data to their national tax authorities, who in turn automatically transmit that data to Portugal when the account holder is a Portuguese resident.
Failure to report income or assets held abroad does not go unnoticed. The Tax Authority routinely cross-checks domestic declarations with foreign disclosures and can initiate audits or enforcement actions when inconsistencies are found.
Risks of Non-Compliance with Tax Reporting Obligations in Portugal
Failure to meet tax reporting obligations may result in:
- Fines ranging from €150 to €3,750 for omissions or delays;
- Daily interest charges on unpaid taxes;
- Audit procedures initiated based on CRS data or anomaly detection;
- Criminal proceedings in cases of deliberate concealment or fraud.
These consequences apply to unreported income, undeclared foreign bank accounts, and failure to disclose foreign tax credits or withholding.
Why Early Planning Matters When It Comes To Tax Reporting Obligations in Portugal
Portuguese tax compliance can be complex, especially when foreign income, pensions, or financial assets are involved. At Madeira Corporate Services, we provide professional assistance in preparing, reviewing, and filing tax returns. We also help clients compile supporting documentation, correctly report foreign income, and prepare for potential audits.
Please get in touch with us if you need tailored guidance or want to ensure your 2025 reporting is fully compliant. Timely and transparent reporting protects against unnecessary legal and financial risk.
The founding of Madeira Corporate Services dates back to 1996. MCS started as a corporate service provider in the Madeira International Business Center and rapidly became a leading management company… Read more
