IRS Jovem is a regime that partially exempts employment income (Category A) and self-employment income (Category B) from taxation for five years, consecutive or not.
The 2024 State Budget Law increased the maximum limits of the benefit and introduced a 100% exemption in the first year of work, with a gradual and progressive increase in the tax payable up to the fifth and final year of the benefit, when the exemption will be 25%.
Who can benefit from the regime
The regime is available to young people who earn employment or self-employment income for the first time after the year in which they complete their studies, provided they meet the following requirements:
- Aged between 18 and 26, with the maximum age extended to 30 if they have obtained a doctorate (level 8 of the National Qualifications Framework);
- Completion of secondary education (level 4 of the National Qualifications Framework) or a higher degree;
- Not included in their parents’ household, i.e. they must file their IRS return on their own, even if they have the same tax address as their parents;
- Not benefiting from other more favourable regimes (non-habitual resident, Programa Regressar, etc.)
How the regime works
IRS Jovem currently allows a partial tax exemption on employment and self-employment income, with the exemption percentage decreasing over time and caps on the maximum exemption amount.
- In the first year, the exemption will be total (100%), capped at €20,370.40 (40x the IAS – Social Support Index);
- In the second year, the exemption will be 75%, capped at €15,277.80 (30x the IAS);
- In the third and fourth years, the exemption will be 50%, capped at €10,185.20 (20x the IAS);
- In the fifth and final year, the exemption will be 25%, capped at €5,092.60 (10x the IAS).
How long the regime lasts
This regime lasts for 5 years, consecutive or not, but ends, regardless of whether there is an actual benefit, when the beneficiary turns 35.
Contact us to find out more.
