Fiscalidade IRS Reembolso Retenção na fonte IRS 2025

IRS 2025: why your refund may be smaller - or you may have to pay

12 April 2025·2 min read

IRS 2025: why your refund may be smaller - or you may have to pay por Pedro Flores - Grupo Your Contabilidade

The tax didn't go up. If your refund is smaller than usual - or if you have to pay - it's not because the State became more expensive. It's because you already received that money throughout the year.

What happened in 2024?

To retroactively reflect the IRS rate reduction approved by the Government, the withholding tax tables were significantly reduced in August and September 2024. In practical terms, many workers received almost no IRS deduction in those two months - and some even received their full salary.

The result is simple: those who already received that money in advance now get less back - or may even be required to pay tax.

Aug + Sep
Withholding tax near zero in those two months

Impact now
Smaller refund or possible payment at final settlement

The tax
Went down - IRS rates have been decreasing in recent years

Is this bad news?

Not necessarily. The president of the Certified Accountants Association, Paula Franco, argues that the current system is fairer: taxpayers receive more monthly, have the money in their pocket throughout the year, and settle with the State at the end - without excessive advance payments.

The problem is that many taxpayers got used to the State's "piggy bank": they received less month by month and had a larger refund at the end of the year. That model no longer applies.

Other reasons you may have to pay

Having two jobs or income sources simultaneously - a situation that almost always implies additional payment
Having obtained capital gains or investment income (stocks, funds, etc.) throughout the year
Receiving income from other categories that were not subject to adequate withholding

What you can do to maximize your refund (in 2025, for 2026)

✅ Always request invoices with your tax number on all purchases throughout the year

✅ Validate invoices on the e-Fatura Portal and correct any errors or omissions

✅ Consider subscribing to a PPR - retirement savings plans still allow relevant tax deductions

✅ Keep receipts from restaurants, accommodation, hairdressers, veterinarians, and gyms - 5% of VAT is deductible

✅ On model 3, check annex H to confirm and complete all pre-filled deductions

New features in the 2025 declaration

This year, filling out the IRS brings two noteworthy changes. The Youth IRS now has a more simplified activation option - although it's not fully automatic. And annex J (foreign income) introduces a specific section for capital gains held for more than one year, correcting a gap that in previous years caused excessive taxation for investors with foreign assets.