Green receipts: Find out if you can be exempt from withholding tax.
If you are self-employed, you may be exempt from retention at source. But after all, in which situations does this exemption apply?
In what situations does the exemption apply to green receipts?
Withholding tax is subject to annual turnover volume. Thus, a worker under the simplified regime who does not have category B income exceeding 14,500 euros annually is exempt from withholding tax. However, this limit is expected to increase to 15,000 euros annually, according to the State Budget publication for 2025.
“Throughout the year, the Tax Authority (AT) applies a rate, known as withholding tax, on the income of non-exempt citizens, whether employees, self-employed workers, or pensioners. This rate serves as an advance payment that taxpayers make to the State on account of the IRS to be paid. When they submit the annual IRS declaration, the AT makes an adjustment," explains DECO PROteste, cited by Notícias ao Minuto.
In addition, workers in sectors such as hospitality, travel agencies, and catering are also covered by the exemption from withholding tax.
This means that, if you are exempt, you will not see a portion of your income deducted whenever you issue an invoice. However, when submitting the annual IRS declaration, you may not be entitled to a refund and, depending on the calculations of the AT, you may even need to pay an additional amount.
It is important to note that if you exceed the annual income limit, you will be required to make withholding tax on the invoice issued immediately after that moment.
Read more: Green receipts: Professional expenses can now be identified on the invoice emission
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