Thousands of taxpayers who, following a medical reassessment, saw their degree of disability fall below 60% lost, from one year to the next, the personal income tax benefit to which they had previously been entitled.
Case law from the higher courts, the 2024 State Budget and the Portuguese Tax Authority’s recent revision of its position have changed this framework. In certain circumstances, taxpayers may retain certain tax benefits or be entitled to recover tax overpaid in previous years.
It is therefore important to understand how the previous and current regimes interact and, in particular, what should be checked where a reassessment results in a reduction in the degree of disability.
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