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Tax Hike on Local Lodging

In the 2017 Portuguese State Budget there will indeed be a change to the tax on Local Lodging. After heated discussions on Thursday evening, it seems that the Government is not going to increase the overall tax rate to 28%.

Instead, the taxable part of the income will increase from 15% to 35%. This means that the current tax rate of net 3.75% will go up to net 8,75% .

An example:  A Local Lodging owner has an income of 100€.

Until 31.12.2016, a tax rate of 25% is applied to 15% of the 100€,

so 15€ are taxable. On this amount,  the tax rate is 25%.

The result: of 100€ income: he pays 3.75€ to the state.

 

As of January 2017, a tax rate of 25% is applied to 35% of the 100€,

so 35€ are taxable. On this amount,  the tax rate is 25%.

The result: of 100€ income: he pays 8.75€ to the state.

 

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