Portugal Updates its Tax Blacklist

The Portuguese Government has announced an important update to its list of jurisdictions with preferential tax regimes — commonly referred to as the “blacklist.” As of 1 January 2026, Uruguay, Hong Kong, and Liechtenstein will be officially removed from this list.

Until 31 December 2025, entities and individuals resident in these jurisdictions will continue to be subject to aggravated tax measures. These include:

• IMT (Property Transfer Tax) applied at a flat rate of 10%, which will later move to the standard progressive rates of up to 7.5%, depending on the property’s value and type.

• IMI (Municipal Property Tax) currently levied at a punitive 7.5% on the property’s taxable value, to be reduced to standard rates of up to 0.45% for urban and 0.8% for rural properties.

• Withholding Tax on Portuguese income, which will decrease from 35% to 25%, or potentially between 10% and 15% under an applicable Double Taxation Agreement (DTA).

From 1 January 2026, the new, reduced tax rates will apply to entities and individuals with registered offices or residence in Uruguay, Hong Kong, and Liechtenstein. This development represents a positive step towards attracting foreign direct investment in Portugal and reflects a move towards a more rational and balanced tax policy.

These changes are expected to have a practical impact on both corporate and individual investors, particularly within the real estate sector. Taxpayers and legal advisors should take this opportunity to re-evaluate existing structures and review ongoing transactions involving these jurisdictions.

The EDGE Tax Team is available to assist clients with compliance, restructuring, and investment strategy in light of these new developments.

For advice or assistance on how these changes may affect your business or property portfolio, please contact our Tax Team at gfigueira@edge-il.com