How much can you deduct?
The Portuguese Tax Authority allows you to deduct 15% of total health expenses for the entire household, up to a maximum limit of 1,000 euros per year. For couples filing separately, this ceiling drops to 500 euros per spouse.
It seems simple, but this is precisely where problems begin.
The most common mistake: invoices pending validation
The biggest slip-up occurs when an invoice remains pending in e-Fatura. This happens whenever the entity that issued the invoice has more than one Economic Activity Code (CAE) registered - in these cases, the system cannot automatically classify the expense and waits for the taxpayer to validate it.
The problem? If the deadline passes without manual validation, the expense is automatically transferred to the "General Family Expenses" category, where the deduction limit is much lower. Result: a significant portion of the tax benefit is lost.
Health insurance: the deduction many forget
Another frequent error is not checking health insurance expenses. The annual premium paid is deductible at 15%, within the same 1,000 euro limit per household.
The trap here is that this information doesn't appear in e-Fatura in the usual way, because it's communicated directly by the insurer to the Tax Authority. Many taxpayers don't even know it exists and never confirm whether the value was actually considered.
Expenses that surprise (and are deductible)
There are several expenses people don't associate with health, but that count for IRS:
- Glasses and contact lenses - deductible, as long as you have a medical prescription and an optician's invoice in your name.
- Health expenses abroad - can be manually included in Annex H of the tax return, as long as you have a medical prescription and adequate documentation.
- Gym - yes, monthly fees can be considered health expenses, but only if there is a medical prescription and the gym has the eligible CAE for that classification.
In summary
Saving on IRS doesn't require tricks, it requires attention. Validate invoices in e-Fatura within the deadline, confirm whether health insurance is being counted, keep medical prescriptions, and don't forget less obvious expenses like glasses or gym.
An hour well spent reviewing e-Fatura can be worth several hundred euros in refund.
