Effective from January 1, 2025, the new "IRS Jovem" regime is a tax measure in Portugal aimed at supporting young workers up to 35 years old. 

The main change compared to the previous regime is the increase in the maximum age from 30 to 35 years and the extension of the benefit duration from 5 to 10 years. In addition, the exemption limit increases to about €28,700, which allows young people a significant tax reduction during the early years of their careers.

This regime offers a progressive exemption from IRS (Personal Income Tax) with the following exemption percentages:

• 100% in the 1st year
• 75% from the 2nd to the 4th year
• 50% from the 5th to the 7th year
• 25% from the 8th to the 10th year

The regime no longer depends on the young person's level of education, being solely based on age and income. Young people can benefit from this regime through their annual IRS declaration or, if preferred, request that the reduction be reflected monthly in their salary by adjusting the tax withholding at source.

Who can benefit from the IRS Jovem?

To be eligible for this exemption, the young person must have income from Category A (employees) or Category B (self-employed workers), and the maximum 10-year period begins in the first year in which the young person files their IRS independently, no longer considered a dependent.

Exceptions to IRS Jovem

Young people who have already benefited from other tax regimes, such as the non-habitual resident regime or the tax incentive for scientific research, are not eligible for this regime. Additionally, it is required that the young person has their tax situation regularized.

This measure aims to promote the inclusion of young people in the labor market, providing them with a greater margin to establish themselves financially and contribute to the national economy.