The specific deduction of the IRS, which excludes from taxation a share of the income of workers and pensioners, will be updated in 2027, but the value is still unknown, depending on the update of the Social Support Index (IAS).
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08/10/2026
by
Lusa
A specific deduction of the IRS, which excludes from taxation a share of the income of workers and pensioners, will be updated in 2027, but the value is still unknown, depending on the update of the Social Support Indexant (IAS).
The State Budget report for 2027 (OE2027) that the Government delivered today to the Assembly of the Republic confirms that next year there will be an increase in the value of the specific deduction, accounting for that revision, together with the updating of the ranks, will have a budgetary impact of EUR 431 million compared to 2026.
However, it is still not possible to say how much the Tax and Customs Authority (AT) will deduct from income at the time of calculating the 2027 IRS because this benchmark is calculated according to the IAS and the report does not provide a forecast of the new value for next year.
The specific deduction acts as a reduction in income before calculating the IRS. Before the tax authorities apply the tax rate for a taxpayer, they subtract a certain amount from gross income.
As the specific deduction amounts to 8.54 times the value of the IAS and the indexing currently corresponds to EUR 537.13, the current deduction is EUR 4.587.09.
In practice, it means that the tax, before calculating the rates of the IRS of a worker, slaughters to gross income EUR 4.587,09.
The IAS is fixed by means of a ordinance defining the value that shall apply annually from 1 January of each year.
In order to determine the exact value, the government has used as a reference two indicators, according to Law No 53-B/2006 of December 29, which creates the indexing of social support and new rules for updating pensions and other social benefits of the Social Security System.
The executive must take into account the average gross domestic product (GDP) growth rate of the last two years, ending in the 3rd quarter of the year preceding the update or in the quarter immediately preceding, if that is not available on 10 December, and also the average change in the last 12 months of the Consumer Price Index (IPC), without housing, available on 30 November of the year preceding the update.
In 2025, the government ordinance was signed on 22 December and published in Diário da República on 30 December, to be effective from 1 January 2026.