Prime Minister Luís Montenegro announced a new IRS reduction up to the sixth bracket, a measure that the chair of the Order of Certified Accountants (OCC), Paula Franco, considers positive, but which will require Portuguese people to do the math again. Paula Franco recalls that taxpayers have already become accustomed over the last two years to managing these reductions, both in 2024 and in 2025.
With the changes to withholding tax, many taxpayers saw the value of their refund decrease when submitting their annual income tax return, while others who habitually received refunds started to pay or pay more. The chair hopes there will be no surprises at the time of the final settlement with the State, arguing that Portuguese people have already understood that the extra money in their pocket will have an impact on the final calculation.
Paula Franco offers advice to avoid surprises when filing IRS in April 2027: taxpayers can ask their employer to change the withholding tax rate. According to the chair, Portuguese people now have more experience and should not find these variations as strange as they did before.
For accountants, the IRS reduction means adjusting software mid-year and explaining to workers why they receive more in one month and less in others. Paula Franco acknowledges that this is the most difficult aspect to communicate, but says that both families and accountants are now better prepared to deal with these changes.
