On this page
Standard rate: 28%Short-holding ruleLong-holding reductionLosses and FIFOReporting broker statementsCommon questionsStandard rate: 28%
When a Portuguese tax resident sells shares, ETFs, bonds, or fund units at a profit, the gain falls into category G (capital gains) and is taxed at a flat 28% by default. The rate applies to the net gain for the year, after losses, regardless of whether the broker is in Portugal or abroad. Dividends and interest are a separate topic, covered in the foreign dividends guide.
You can instead elect aggregation, called englobamento, which folds the gains into your general income and taxes them at progressive rates. That only helps when your overall income is low enough that your marginal rate sits below 28%, and the election covers the whole category, so run the numbers before ticking the box.
Short-holding rule
Since 2023 the 28% flat rate has an important exception. Gains on securities held for less than 365 days are compulsorily aggregated with your other income when your total taxable income, including those gains, reaches the top bracket of Portuguese income tax (IRS). For 2026 that threshold is 86,634 euros, and the aggregated gains are taxed at the top marginal rate of 48%, with the solidarity surcharge on top at high incomes.
The rule targets short-term trading by high earners. If you hold positions for over a year, or your income sits below the top bracket, the flat 28% remains available. Active traders near the threshold should track holding periods carefully, because a profitable year of quick trades can push you into mandatory aggregation on its own.
Long-holding reduction
A 2024 capital markets law (Lei 31/2024) added a reward for patience. For securities admitted to trading on a regulated market and units in open-ended funds, part of the gain is excluded from tax based on how long you held the asset:
| Holding period | Gain excluded | Effective rate at 28% |
|---|---|---|
| More than 2 years, up to 5 | 10% | 25.2% |
| More than 5 years, up to 8 | 20% | 22.4% |
| More than 8 years | 30% | 19.6% |
The exclusion applies to the taxable base before the rate, and it does not extend to assets in blacklisted jurisdictions. How your pre-2024 holding period counts has transitional wrinkles, so confirm the counting rules for your positions before relying on the discount.
Worked example
Elena, a Lisbon resident, sells ETF units she has held for six years and realises a gain of 10,000 euros (a round figure for illustration).
That is an effective 22.4% on the full gain. The exclusion assumes the units trade on a regulated market and that the transitional counting rules confirm her holding period.
Losses and FIFO
Losses on securities offset gains in the same category in the same year automatically. Carrying a net loss forward is possible for up to five years, but only if you elect aggregation for the loss year, and the election then has to be maintained in the years you use the loss. That trade-off deserves a calculation: a small loss carried forward can cost more in progressive tax than it saves.
When you sell part of a position bought in tranches, Portugal applies FIFO, first in first out. The shares you bought earliest are deemed sold first, which sets both the cost basis and the holding period. Brokers that report average cost will not match the Portuguese calculation, so keep your own purchase history.
Common mistakes
- Trusting broker average cost. Portugal applies FIFO per security, so an average-cost report misstates both the gain and the holding period; rebuild the figures from your own purchase history.
- Skipping Anexo J in a no-sale year. A foreign brokerage account is disclosed every year you hold it, even when nothing was sold.
- Electing aggregation blind. Englobamento covers the whole category, so ticking the box without running the simulation can push the bill above the flat 28%.
- Losing a carried loss. The five-year carry-forward requires aggregation in the loss year and in every year you use the loss; drop the election and the loss is gone.
- Ignoring the 365-day test near the top bracket. Short-held gains plus a salary can cross the 86,634 euro line together, triggering mandatory aggregation at up to 48% even though neither figure crosses it alone.
Reporting broker statements
Reconstruct each sale
A statement total is the starting point. The reporting instructions ask for the details behind the transactions.
- AcquisitionIdentify the holding and its purchase date and amount.
- DisposalMatch the sale date and proceeds to the holding sold.
- Costs and taxKeep supporting expenses and foreign-tax evidence alongside it.
Get the annual tax report
Most brokers issue a yearly report listing each sale with dates, proceeds, and cost. For foreign brokers, download it yourself; nothing is reported to Portugal automatically on your behalf.
Rebuild the figures the Portuguese way
Apply FIFO per security, convert to euros, and note acquisition and sale dates. Dates drive the 365-day test and the long-holding exclusion.
File the right annex
Sales through a Portuguese broker go in Anexo G of the Modelo 3. Sales through a foreign broker go in the securities block of Anexo J, alongside the disclosure of the foreign account itself. The Anexo J guide walks through that form.
Check the simulation
The portal simulation shows the tax before you submit. Verify the flat rate or the exclusion applied the way you expected.
Common questions
I did not sell anything this year. Do I still declare?
You have no gain to declare, but a foreign brokerage account is still disclosed in Anexo J even in years with no sales.
Do accumulating ETFs avoid tax?
They defer it. No dividend is distributed, so nothing is taxed yearly; the whole return is taxed as a gain when you sell, potentially with the long-holding exclusion.
My broker withheld tax abroad on a sale. What happens?
Declare the gross gain in Anexo J with the foreign tax paid, and Portugal applies a credit up to the Portuguese tax due. Treaties usually give Portugal the sole right to tax gains on shares, so foreign withholding is often reclaimable at source instead.
Does IFICI exempt my capital gains?
Foreign-source gains are generally within the IFICI exemption for holders, with blacklist exceptions. See the IFICI guide, and declare everything either way.
Sources
- CIRS articles 10, 43, 55 and 72 (capital gains, exclusions, losses, rates)
- Lei 31/2024 (capital markets law introducing the holding-period exclusions)
- PwC Portugal 2026 tax guide and Madeira Corporate Services capital gains guide (checked August 2026)
- Autoridade Tributária, Modelo 3 Anexo G and Anexo J instructions
This guide is general information, not personalised tax advice. Rules and rates change, and your facts can move you off the defaults described here. Confirm your position with a qualified professional before acting on it.