Simplified regime vs organised accounting in Portugal for self-employed workers
Summary
- The simplified regime (regime simplificado) taxes a fixed share of your gross income. That share is set by a coefficient tied to your activity type, so you do not file a full cost ledger.
- For the professions listed in the table in article 151 of the IRS Code the coefficient is 0.75. For other services it is 0.35. For sales of goods it is 0.15.
- You stay in the simplified regime if your gross category B income stayed at or below 200,000 euros in the previous tax year.
- Organised accounting (contabilidade organizada) becomes compulsory only if you pass that limit in two tax years in a row, or pass it by more than 25% in a single year.
- Under the 0.75 and 0.35 coefficients you must justify expenses worth 15% of your gross service income. Any shortfall is added back to your taxable income.
- Organised accounting must be handled by a certified accountant (contabilista certificado). You can also choose it voluntarily, by the end of March.
Introduction
If you work for yourself in Portugal, your tax bill depends on a choice many people never actively make. The simplified regime, which most self-employed people in Portugal fall into, is one of two ways to work out your business income. The other is organised accounting. The simplified regime applies a fixed coefficient to your turnover. Organised accounting looks at your real income and your real costs. One is cheaper to run. The other can produce a lower taxable income if your costs are high.
The rules sit in the IRS Code and they changed more than once in recent years. This article explains how each method works in tax year 2026, when the switch becomes compulsory, and what each option asks of you. It is general information, not tax advice, and the right answer depends on your own numbers.
How does the simplified regime work for self-employed people in Portugal?
The simplified regime calculates your taxable income by multiplying your gross income by a coefficient. The coefficient depends on what you do. A freelancer in a listed profession is taxed on 75% of gross income. Someone selling goods is taxed on 15%. You do not submit a profit and loss account. The remaining share stands in for your business costs.
This is the part people find surprising. The coefficient is applied whether your real costs were high or low that year. Take two translators. One has almost no overheads, the other rents an expensive studio. Both are taxed on the same 75% share, as long as both are registered under a profession in the article 151 table. The result is then added to your other income and taxed at the normal progressive IRS rates.
There is one relief for people who are just starting. The coefficients for listed professions, for other services and for the 0.10 category are cut by half in the year you open your activity. In the second year the cut is 25%. That reduction only applies if you earn no employment or pension income in those years. It also does not apply if you closed a previous activity less than five years ago.
Coefficients by activity type
The table below shows the full list for tax year 2026. Check which line matches the activity code you registered with the tax authority, because the code drives the coefficient.
IRS simplified regime coefficients by type of income, tax year 2026
| Type of income | Coefficient | Share of gross income taxed |
|---|---|---|
| Sales of goods and products, crypto-asset operations other than mining, restaurant, drinks and hotel services (not local accommodation in a house or apartment) | 0.15 | 15% |
| Income from the professions listed in the table in article 151 of the IRS Code | 0.75 | 75% |
| Other services not covered by the two lines above | 0.35 | 35% |
| Crypto-asset mining, intellectual and industrial property income, capital income linked to the activity, positive rental result, net capital gains, other asset increases | 0.95 | 95% |
| Grants and subsidies not intended for running the business | 0.30 | 30% |
| Operating subsidies and other category B income not listed above | 0.10 | 10% |
| Services invoiced to a tax-transparent company you are a partner in, or to a company where the holding tests in the law are met | 1.00 | 100% |
| Local accommodation in a house or apartment located in a containment area | 0.50 | 50% |
To see what a coefficient does to a real number, the self-employment tax calculator is quicker than a spreadsheet.
What is the income limit for the simplified regime in 2026?
You are covered by the simplified regime if your gross category B income did not pass 200,000 euros in the tax year immediately before. The limit looks at gross income, not profit, so your costs do not bring it down. Going over it once does not move you. If you are opening your activity, the tax authority uses the annual figure you estimate in your start-of-activity declaration.
That is why a single year above the limit changes nothing by itself. The simplified regime only ends when you pass 200,000 euros in two tax years in a row. It also ends when you pass it in a single year by more than 25%, which means more than 250,000 euros. In both cases organised accounting applies from the tax year after the one in which that happened, not retroactively.
That timing matters for planning. If 2025 and 2026 both close above the limit, organised accounting applies to 2027. You would need an accountant in place before that year starts, not when you file. The same rule can apply after the tax authority corrects your declared figures upwards.
Do you have to prove any expenses under the simplified regime?
Yes, partly. For income taxed at 0.75 or 0.35, part of the deduction is conditional. You must be able to account for expenses equal to 15% of your gross service income. If you cannot, the difference is added to your taxable income. Sales of goods taxed at 0.15 are outside this rule. So the regime is lighter on paperwork, but it is not paperwork-free.
Several things count towards that 15%. The first is the specific deduction, set at 8.54 times the IAS, or your compulsory social security contributions if those are higher. With the IAS at 537.13 euros in 2026, that deduction is 4,587.09 euros. On top of it, several real costs count: staff costs reported to the tax authority, and rent for business premises shown on reported invoices. A percentage of the rateable value of business property counts as well. So do other goods and services on invoices carrying your tax number, plus imports and intra-EU purchases linked to the activity.
For many freelancers the specific deduction alone covers the 15% test, because 15% of gross service income only passes 4,587.09 euros once turnover passes roughly 30,580 euros. Above that level the invoices start to matter. Items used only partly for the business count for 25% of their value. You have to flag them on the Portal das Finanças by the end of February of the following year. It helps to validate your invoices on e-Fatura through the year rather than in one rush.
What organised accounting involves
Organised accounting drops the coefficient entirely. Your taxable income is your real income minus your real deductible costs, worked out under commercial and tax accounting rules. Anyone in category B who is not covered by the simplified regime must keep organised accounting, and the same obligations apply if you opt into it voluntarily.
A certified accountant is compulsory
This is not optional and it is not a matter of preference. Planning, organising and running the accounts of an entity that keeps organised accounting is reserved for certified accountants registered with the Ordem dos Contabilistas Certificados. That accountant takes technical responsibility for the accounting and tax work, and signs the financial statements and tax returns alongside you. So the real comparison is never just tax against tax. It is tax plus professional fees against tax.
How social security is calculated changes too
Under the simplified regime your contribution base is built from the income you report each quarter. Under organised accounting your monthly contribution base is one twelfth of the taxable profit (lucro tributável) of the previous calendar year, so the 2026 contribution year runs on the profit for tax year 2024. There is no separate social security form to file. The tax authority passes your declared figures to Segurança Social, which fixes the base in October for the year that follows and shows it in Segurança Social Direta. The quarterly social security declaration no longer applies by default. You can ask to go back to the quarterly method until 30 November, and it then applies from January.
When does organised accounting work out better?
Organised accounting tends to favour people whose real business costs are higher than the share the coefficient already assumes. A consultant taxed at 0.75 is treated as if costs were 25% of turnover. If actual costs are well above that, the coefficient is working against them. If costs are far below it, the coefficient is generous.
Activity type is usually the clearest signal. Businesses with staff, premises, stock, equipment or heavy subcontracting often sit above the assumed level. Service work done from a laptop usually sits below it. A loss can also be carried forward under organised accounting, which the simplified regime does not allow, and that matters in a year with large one-off investment.
None of this settles the question on its own. The accountant’s fee and the extra bookkeeping belong in the same comparison. So does the social security effect, and the fact that your choice stays in place until you change it. The rules also differ by situation, and a calculation that fits one freelancer can be wrong for another with the same turnover. Our guide on how much tax you pay when self-employed sets out the other pieces that feed into it.
How and when can you switch between the two regimes?
If you are in the simplified regime, you can choose organised accounting instead. You make that choice in your start-of-activity declaration. You can also file a declaração de alterações by the end of March of the year you want it to apply from. File it in time and it covers that same year.
There is no longer a fixed multi-year lock. The choice stays valid until you file a new declaração de alterações. That change takes effect from the year it is filed, again as long as it reaches the tax authority by the end of March. In practice this still means thinking in whole tax years, because a late filing pushes the change to the next one.
Going the other way uses the same mechanism, and nothing changes unless you file. The exception is a compulsory move, which follows automatically from passing the income limit and is not something you file for. If you are unsure which regime your file currently shows, it is worth checking before the March window closes rather than after. Getting the IRS Modelo 3 filing right in spring starts with the regime you were in on 1 January.
What should you check before you choose?
Start with the coefficient your activity code actually triggers, because that single number sets the whole comparison. Then look at your real costs over a normal year, not an unusual one. Then add the cost of a certified accountant and the time organised accounting takes. Compare the two results across a few years, not a single one.
Two practical points get missed. The 15% expense rule means invoices with your tax number are worth collecting either way. And your activity code, not your job title, drives everything. A code registered years ago may no longer describe what you do, and the wrong one can put you on the wrong coefficient for years.
Tytle explains which regime you fall under and what each one asks of you, and helps you prepare the paperwork that goes with it. If you are setting up or reviewing your status, you can start with green receipts setup and management.
Frequently asked questions
The regime simplificado, or simplified regime, is one of two ways to work out business and professional income for IRS purposes. It does not look at your actual costs. Instead it multiplies your gross income by a coefficient set in the IRS Code, and the result is your taxable income. The coefficient depends on the type of income and runs from 0.10 to 1.00, for example 0.15 for sales of goods and 0.75 for the professions listed in the table in article 151 of the IRS Code. The remaining share stands in for business expenses. You are covered by this regime if your gross category B income stayed at or below 200,000 euros in the previous tax year and you did not opt for organised accounting. It is also the default method, so many self-employed people end up in it without ever actively choosing it.
It depends on how your activity is registered. If your profession appears in the table referred to in article 151 of the IRS Code, the coefficient is 0.75, which means 75% of your gross income is taxed. If you provide services that are not in that table, the coefficient is 0.35. Restaurant, drinks and hotel services, and sales of goods and products, are taxed at 0.15. Local accommodation in a house or apartment in a containment area is taxed at 0.50. Because the code you registered with the tax authority decides this, it is worth confirming that the code still matches what you actually do. A code chosen at registration is easy to forget and hard to spot later.
The limit is 200,000 euros of gross category B income in the tax year immediately before. It is measured on gross income, not on profit, so costs do not reduce it. If you are starting out, the tax authority uses the annual figure you estimate in your start-of-activity declaration instead. Staying under the limit keeps you in the simplified regime unless you choose organised accounting yourself. Going over it in one year does not change anything on its own, because the rules require either two consecutive years above the limit or a single year more than 25% above it. The figure is unchanged for tax year 2026.
Organised accounting becomes compulsory from the tax year following the second year above the limit. The same applies if you exceed the limit by more than 25% in a single year, which means more than 250,000 euros. The change is not retroactive, so the years already closed stay under the simplified regime. What it does mean is that you need a certified accountant in place before the new tax year starts, because organised accounting has to run from 1 January. The rule can also be triggered when the tax authority corrects your declared figures upwards. Note that the two years have to be consecutive, so a good year in between resets the count.
Yes, if your income is taxed at the 0.75 or 0.35 coefficient. Part of the deduction built into those coefficients is conditional on real expenses. You need expenses equal to 15% of your gross service income, and whatever you fall short by is added to your taxable income. The specific deduction, set at 8.54 times the IAS, counts towards that total, and so do staff costs, business rent, part of the rateable value of business property, and goods and services on invoices carrying your tax number. Sales of goods taxed at 0.15 are not subject to this rule. Flagging the right invoices on the Portal das Finanças by the end of February of the following year is part of the same obligation.
The positive difference between 15% of your gross service income and the expenses you can account for is added to your taxable income. So the penalty is not a fine. It is a higher taxable base, which then feeds into the normal progressive IRS rates. In practice the specific deduction of 4,587.09 euros in 2026 covers the test on its own until gross service income passes roughly 30,580 euros. Above that level, invoices reported with your tax number start to carry real weight, and items used only partly for business count at 25% of their value. The shortfall is measured against gross service income, so a year with high turnover and few invoices is where it bites hardest.
Yes. Planning, organising and running the accounts of an entity that keeps or must keep organised accounting is an activity reserved by law for accountants registered with the Ordem dos Contabilistas Certificados. The certified accountant takes technical responsibility for the accounting and tax side, and signs the financial statements and tax declarations together with you. This applies whether organised accounting became compulsory because of your income level or you chose it voluntarily. It is why any comparison between the two regimes has to include professional fees, not just the tax figure. The simplified regime carries no equivalent requirement, which explains much of the cost gap between the two.
You can choose organised accounting in your start-of-activity declaration, or later by filing a declaração de alterações by the end of March of the year you want it to apply from. Filed in time, it covers that same tax year. There is no fixed multi-year lock any more. The choice stays valid until you file a new declaração de alterações, and that change also takes effect from the year it is filed, provided it arrives by the end of March. Missing the March deadline does not cancel the change, it simply pushes it to the following tax year. A compulsory move caused by the income limit works differently, because it applies automatically and is not something you file for.
It is normally more expensive in direct costs, because a certified accountant is required and the bookkeeping is heavier. Whether it is more expensive overall depends on your real expenses. The coefficient already assumes a fixed level of costs, for example 25% of turnover at the 0.75 coefficient. If your actual costs are clearly above the assumed level, organised accounting can produce a lower taxable income. If they are below it, the simplified regime usually works out better. Organised accounting also allows losses to be carried forward, which the simplified regime does not. The outcome varies by situation, and running both calculations on the same year’s figures is the only reliable way to see it.
Under the simplified regime your contribution base is built from the income you declare each quarter, in January, April, July and October. Under organised accounting your monthly contribution base is one twelfth of the taxable profit (lucro tributável) of the previous calendar year, so the 2026 contribution year runs on the profit for tax year 2024. There is no separate social security form: the tax authority passes your declared figures to Segurança Social, which fixes the base in October for the following year and shows it in Segurança Social Direta. The quarterly declaration does not apply by default. If you prefer the quarterly method, you can ask for it until 30 November and it applies from January. The two regimes therefore differ in timing as well as in how the contribution base is worked out. What changes is how the base is set and when you report it, which can affect the amount due in a given year.
This content is for informational purposes only and does not constitute tax, legal, or financial advice. Tax laws change frequently and vary by jurisdiction. Consult a qualified tax professional for advice specific to your situation.
