Modelo 10: Income and Withholdings - What it is, who files and how to comply

What is Modelo 10?

Modelo 10 is an annual tax declaration that must be filed by entities that pay certain types of income to individual taxpayers residing in Portugal. Its main purpose is to report to the Portuguese Tax Authority (AT) any income paid or made available that is exempt from IRS (personal income tax) or that, for any other reason, was not subject to withholding tax.

In practical terms, it serves as a cross-referencing tool between what companies and other entities pay their beneficiaries and what the latter declare in their annual IRS return. The AT uses this information to pre-fill individual tax returns and to detect possible omissions or irregularities.

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Technical Summary

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Who Must File Modelo 10?

The obligation to file Modelo 10 falls on all entities - individual or corporate - that, during the previous year, paid or made available income falling within the categories indicated below. Examples of obligated entities include:

Companies and commercial entities

Associations and foundations

Public administration bodies

Banks and insurance companies

Condominiums and real estate management entities

Self-employed professionals who pay income to third parties

Note: The obligation exists even if no withholding tax was applied - namely when income is exempt from IRS or when the beneficiary has submitted a declaration of non-subjection to withholding.

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What Income Must Be Declared?

Modelo 10 covers income from various IRS categories that, because they are exempt or not subject to withholding, must still be reported to the AT.

Category A - Employment Income

Employment income exempt from IRS, namely meal allowances above the legal limit, termination indemnities within exemption limits, and other accessory income not subject to withholding.

Category E - Capital Income

Interest, dividends and other capital income when paid to residents and not subject to withholding tax, as well as profits distributed by exempt entities or under special regimes.

Category F - Property Income

Rents from properties received by individuals that were not subject to withholding tax. Includes residential, commercial and other property rents.

Category G - Capital Gains

Indemnities and other patrimonial increments not subject to withholding that must be reported.

Category H - Pensions

Retirement, disability and survivor pensions within the exemption limits provided by the IRS Code.

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How to File Modelo 10?

Filing Modelo 10 is done exclusively electronically through the Portal das Finanças. There is no option for paper or in-person filing. The process is:

Access Portal das Finanças with the entity's credentials (NIF and password or Digital Mobile Key)

Navigate to "Entregar" > "Declarações" > "Modelo 10"

Fill in the declarant entity's data and the income beneficiaries' details

Enter the amounts paid, withholdings made and respective income codes

Submit the declaration and save the filing receipt

Tip: Prepare all beneficiary data in advance, including NIF, income code, gross amount paid and amount withheld.

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2026 Filing Deadline

For income earned during 2025, the legal filing deadline for Modelo 10 is 31 January 2026. This date is established by Article 119 of the IRS Code and, unless exceptionally extended by AT order, does not admit extensions.

Regular consultation of the Portal das Finanças is recommended to confirm any changes to the official deadline.

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Consequences of Non-Compliance

Failure to file or late filing of Modelo 10 can result in significant tax consequences. According to the General Regime of Tax Offences (RGIT), penalties include:

Fine for failure to file: between €150 and €3,750

Fine for late filing, with reduced amount if voluntarily regularised

Compensatory interest in case of income omission affecting tax assessment

Joint liability for the tax the beneficiary should have paid, in cases of wilful omission

Non-compliance may also trigger tax inspection proceedings.

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Most Common Mistakes to Avoid

Omitting exempt income - many entities wrongly assume that IRS-exempt income does not need to be declared

Incorrect beneficiary NIF - invalidates the communication and may generate AT notifications

Inappropriate income code - essential for correct IRS pre-filling

Confusing Modelo 10 with DMR - the DMR serves different purposes; Modelo 10 is annual and covers exempt or non-withheld income

Late filing - lack of advance planning is the most frequent cause of non-compliance

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Modelo 10 vs. Monthly Remuneration Declaration (DMR)

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Practical Recommendations

Keep an updated record of all payments to individuals throughout the year

Regularly check the Portal das Finanças to confirm deadlines and possible changes

Use accounting software that allows automatic data export

Consult a certified accountant if in doubt about income categorisation

Always keep the filing receipt generated by Portal das Finanças

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Count on Grupo Your

At Grupo Your, we help companies meet all their tax obligations on time and without complications. If you need support with Modelo 10 or any other filing obligation, contact us.

This article is for informational purposes only and does not replace specialised legal or accounting advice.

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