Portuguese IRS developments 2026 include two recent decisions worth tracking together. The first is an Autoridade Tributária e Aduaneira (AT) binding ruling (Ficha Doutrinária Processo n.º 30430, dated 7 May 2026) on the date of acquisition of real estate received by succession: the acquisition date for mais-valias (capital-gains) purposes is the date of death of the autor da herança (testator), not the date on which the deceased originally acquired the property. The second is an arbitral decision of the CAAD – Centro de Arbitragem Administrativa (Processo n.º 836/2025-T, 9 March 2026) on the burden of proof for per-diem allowances under Categoria A: where amounts have been declared as ajudas de custo within the statutory limits, the burden lies on AT to demonstrate that they constitute disguised remuneration, not on the taxpayer or the employer to evidence each trip. The two sit at opposite ends of the CIRS (Personal Income Tax Code), but they share an operative through-line: the IRS position turns on the precise statutory hook and on the evidence that supports the chosen characterisation.
Inherited real estate: the IRS acquisition date resets at the opening of the succession
The exclusion in Article 5 of Decreto-Lei n.º 442-A/88, of 30 November (the CIRS introduction statute), removes from IRS the gains on the disposal of immovable property, both rústicos and urbanos, with the exception of terrenos para construção (land for development), acquired before 1 January 1989. The rationale is the standard inter-temporal one: assets acquired before the IRS (personal income tax) came into force benefit from the regime that applied at the time of acquisition, not the regime in force at the time of disposal.
Where the property is acquired by succession, the question is which acquisition date counts: the deceased’s, or the heir’s. AT’s position, stated in Circular n.º 21/92, of 19 October 1992, is that the moment of acquisition by succession mortis causa is the opening of the succession, namely the date of death of the autor da herança. The Ficha Doutrinária Processo n.º 30430 has now reconfirmed that position in a concrete case: a property acquired by the deceased before 1989, who died in 1996, sold by the heir in 2025. The applicant argued that the pre-1989 exclusion should transmit with the property to the heir; AT concluded that it does not. The acquisition date for IRS purposes is 1996, after the CIRS had entered into force, and the 2025 disposal is therefore taxable under Article 10(1)(a) CIRS and is declared on Anexo G of the Modelo 3, not on Anexo G1.
The operational consequence for cross-border clients with Portuguese real estate inherited from a Portuguese-resident decedent is straightforward: a long-standing family ownership of the underlying immovable does not preserve the pre-1989 exemption once succession has interposed. The relevant acquisition value for the mais-valia computation is the value declared (or determinable) at the date of death, increased by capital improvements and acquisition costs evidenced on a transactional basis. Where the heir is non-resident, the interaction between Article 43(2) CIRS (currently providing the optional 50% inclusion in line with EU jurisprudence) and the relevant treaty article on gains from immovable property (typically Article 13(1) of the OECD model) has to be modelled on the actual figures before any disposal decision is taken.
The Modelo 3 reporting choice is not formal. The disposal goes on Anexo G with the transactional evidence (acquisition value at the date of death, disposal value, dates, and allowable expenses), not on Anexo G1, which is reserved for disposals that benefit from the pre-1989 exclusion. Filing on G1 in error invites correction by AT, with consequences for any mais-valia not declared.
Per-diem allowances: the burden of proof lies with AT
Article 2(3)(e) of CIRS, read with Article 2(6), excludes from Categoria A the ajudas de custo (per-diem allowances) paid within the legal limits set for State servants. The exclusion is a delimitação negativa de incidência (a negative scope rule): payments that meet the conditions and stay within the limits do not enter the tax base in the first place. This is the architecture the CAAD has now reapplied in Processo n.º 836/2025-T.
The case had two strands. In one, AT had recharacterised a seven-day August hotel stay in the Algarve (two adults and one child) charged to the employer as remuneração acessória (additional compensation) under Article 2(3)(b)(6) CIRS. The arbitral tribunal upheld this part of the assessment: a family holiday paid for by the employer is not a per-diem, and the operative facts (date, location, composition of the stay) speak for themselves. In the other strand, AT had also recharacterised €9,391.32 in monthly mileage allowances as disguised salary, on the basis that the monthly amounts were similar across the year, that multiple employees had visited the same client on the same day, and that some destinations had no commercial relationship with the employer. The tribunal annulled this part of the liquidação.
The reasoning is consistent with the line of Supremo Tribunal Administrativo (STA – Supreme Administrative Court) and Tribunal Central Administrativo Sul (TCA-S – Southern Administrative Central Court) jurisprudence the decision expressly cites: STA’s ruling (Acórdão) de 28 January 2015, processo n.º 0901/14; TCA-S Acórdão de 23 January 2025, processo n.º 116/14BELRS; TCA-S Acórdão de 11 March 2021, processo n.º 98/09.6BESNT; and TCA-S Acórdão de 14 January 2021, processo n.º 79/06.1BESNT. The shared holding is that where the taxpayer has filed a Modelo 3 declaring per-diems within the statutory limits, the declaration enjoys the presunção de veracidade (presumption of truth) in Article 75(1) of the Lei Geral Tributária (General Tax Law). To displace that presumption, AT bears the burden of proof under Article 74(1) LGT and must show specifically, not generically, that the conditions for the per-diem characterisation are not met. The arbitral tribunal restated the test: AT must demonstrate either that the trips did not take place, or that they were made for the taxpayer’s private rather than professional purposes. Observations that the monthly totals are similar, or that several employees visited the same destination on the same day, fall short of that standard.
The practical implications for resident employers are twofold. First, the per-diem documentation is not optional. Mapas de deslocação (travel maps) identifying the date, destination, vehicle, distance, and business purpose are the standard evidence; once produced, the burden then shifts to AT to displace them by specific findings. Second, the dividing line between ajudas de custo and remuneração acessória is substantive, not formal: a benefit consumed at the employee’s discretion, on a date and in a place unconnected with the employer’s commercial activity, is taxable under Categoria A regardless of how the underlying invoice is captioned. The Algarve hotel strand of the same decision illustrates the second point as clearly as the mileage strand illustrates the first.
Portuguese IRS developments 2026: position and evidence as the operative test
Both decisions are reminders that the answer to an IRS question in Portugal is rarely intuitive and almost always turns on two things: the precise statutory hook, and the evidence that supports the chosen characterisation. In the inheritance case, the hook is Article 5 of DL 442-A/88 read with Article 10 CIRS, and the relevant evidence is the date of death of the autor da herança, captured in the certidão de óbito (death certificate) and reflected in the partilhas (divisions of an estate). In the per-diem case, the hook is Article 2(3)(e) and (6) CIRS, and the relevant evidence is the mapas de deslocação and the business rationale for each trip. Where either side of the equation is weak, the position is exposed: not because the substance is wrong, but because the formal architecture has not been respected.
For cross-border clients with Portuguese real estate, the inheritance ruling is best read as a planning prompt rather than a surprise: where a pre-1989 acquisition has been preserved through several generations, the IRS position on disposal is governed by the most recent succession, not by the original purchase. For resident employers and their finance teams, the per-diem decision is a useful procedural marker: the mileage mapas should be kept to a standard that withstands inspection, and the line between compensatory per-diem and remunerative benefit should be policed at the point of payment, not at the point of audit. MCS can assist on both fronts, subject to the usual scoping conventions: review of the relevant Modelo 3 and supporting documentation for inheritance dispositions, and review of per-diem policies and mapas for resident employers, with prioritised next steps where the current position carries identifiable risk.
This article is provided for general information only. It does not constitute, and should not be relied upon as, legal, tax, accounting, or other professional advice. Portuguese tax legislation, Autoridade Tributária e Aduaneira practice, and CAAD and judicial decisions continue to evolve, and the application of the rules referenced here depends on the specific facts of each case. MCS, Madeira Corporate Services, accepts no liability for action taken in reliance on this article. Readers seeking advice on their own position should contact MCS directly to discuss engagement on a scope-controlled basis.
Miguel Pinto-Correia holds a Master Degree in International Economics and European Studies from ISEG – Lisbon School of Economics & Management and a Bachelor Degree in Economics from Nova School of Business and Economics. He is a permanent member of the Order of the Economists (Ordem dos Economistas)… Read more
