Helping to fight the pandemic in Portugal at no additional cost: how to donate IRS income tax

Taxpayers may allocate part of the tax for the benefit of the State to an entity that provides social services, without penalising reimbursement.

Photo by Kat Yukawa on Unsplash

Editorial Team

6 May 2020, 12:50

The campaign for filing 2019 IRS income tax in Portugal kicked off on 1st April 2020 in the midst of the coronavirus pandemic, and taxpayers now have less than 2 months to file their tax returns - the deadline is 30th June 2020. This year's campaign can also be taken advantage of as an opportunity to show solidarity and help combat the COVID-19 outbreak. How can this be done? By donating part of the income tax to different entities, at no extra cost to taxpayers. Let's have a closer look at the initiative.

When filing their tax return, taxpayers are asked if they want to assign part of the tax to particular entities, whether it is to firefighters, associations, charities, cultural groups or foundations, among others. In other words, it is possible to donate 0.5% of the IRS paid to one of the entities validated by the tax authorities, many of which are helping in the fight against the pandemic - the list is made available annually on the tax agency website, Portal das Finanças.

In practice, the tax will benefit the entity indicated by the taxpayer, instead of being directly forwarded to State funds. It is worth noting that this option is free of charge, optional, and without any impact on the tax refund to be received.

This year, there is another "solidarity" option, namely to assign the tax benefit relating to VAT deduction. This is also optional but, in this case, has an associated cost, because this amount can no longer be deducted from personal income tax, which means that the taxpayer will either receive less in their rebate or, in the case of having to pay, will have an additional tax.