Around two hundred municipalities will return, in whole or in part, the Income Tax revenues to which they would be entitled, according to the Business Journal. Government estimates, included in the State Budget for 2025, point to a total of 557.8 million euros to be returned to taxpayers.
According to data from the Tax and Customs Authority (AT), 43 municipalities decided to fully return the amount that, by law, could be channeled into their coffers, an increase compared to the 41 that did so in 2024. Another 15 municipalities chose to return part of the budget and, among those who already applied this measure, 17 increased the percentage returned.
According to , among the municipalities that return the entire amount, Lisbon, Funchal, Loulé, Arganil and Lagos stand out. In the capital, the total return corresponds to an estimated amount of R$86 million. In Porto, the percentage of IRS borne by taxpayers was reduced from 3.5% to 3%. Sintra, which until now had not returned any amount, now returns 1%, while Amadora lowered the rate from 3.8% to 3.5%.
On the other hand, 99 municipalities decided not to join this mechanism, preferring to use the revenue in other ways. Among these are Coimbra, Fundão, Leiria, Seixal and Guimarães. In 249 municipalities, return rates remain the same as in 2024. There is still no information on the decision for eight municipalities: Arouca, Avis, Barreiro, Lajes do Pico, Moita, Ribeira de Pena, Silves and Vila Verde.
Regarding the Algarve municipalities, in addition to Lagos and Loulé, other municipalities in the region will also be able to return part of the revenue to residents, albeit at lower percentages.
In total, Government estimates indicate that municipalities will receive R$762 million from the return of Income Tax, of which close to R$558 million will be returned directly to taxpayers.
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