The deduction for donations in the 2026 Personal Income Tax (IRS) represents a significant tax incentive for individual taxpayers who support entities with social, cultural, environmental, sports, educational, or scientific purposes. This tax benefit allows a percentage of the donated amounts to be deducted from the IRS assessment, with uplift factors that vary depending on the nature of the donation. However, it is crucial to understand the limits, the eligibility conditions of the recipient entities, and the declaration procedures to correctly benefit from this incentive.

Deduction for Donations in the 2026 IRS: General Framework and Uplift Factors

Portuguese tax legislation, particularly the Tax Benefits Statute (EBF), establishes a patronage incentive scheme aimed at stimulating private participation in financing activities of public interest. For individual taxpayers, the deduction for donations in the 2026 IRS allows a percentage of the amounts donated to duly recognised entities to be deducted from the tax assessment.

The general rule provides for a deduction of 25% of donation expenses. However, this amount can be uplifted, meaning that the State recognises a higher value than the amount actually donated for the purpose of calculating the deduction. The applicable uplift factors depend on the area of intervention of the beneficiary entity:

• 130% Uplift: Applies to donations of a social and cultural nature. This means that for every €100 donated, the State considers €130 for deduction purposes.
• 140% Uplift: Applies to donations of an environmental, sports, educational, and scientific nature. In this case, for every €100 donated, the value considered for deduction is €140.

It is essential to note that these uplift factors apply to the value of the donation for the purpose of calculating the deduction, and not to the deduction percentage itself. The deduction percentage remains at 25% of the uplifted value.

Limits on Donation Deductions

Despite the incentive, the deduction for donations is subject to a maximum limit, as established in Article 63 of the EBF. This limit corresponds to 15% of the IRS assessment. This means that, regardless of the total value of donations and the applicable uplift factors, the maximum amount that can be deducted cannot exceed 15% of the tax calculated before any deductions. This limit aims to ensure a balance between the incentive for patronage and the sustainability of tax revenues.

It is important for taxpayers to understand this limit to avoid unrealistic expectations regarding the tax benefit. The IRS assessment is the amount of tax calculated on taxable income, after applying general or special rates and before any deductions from the assessment.

Patronage Statute and Uplift Factors in the 2026 IRS

The Patronage Statute, enshrined in the EBF, is the legal pillar that supports the granting of tax benefits to those who financially support entities operating in areas of public interest. Uplift factors are a key instrument of this statute to direct support towards specific sectors considered strategic.

Type of Donation	Applicable Uplift	Deduction Calculation on €1,000 Donated	Basis for Deduction Calculation
Social	130%	25% * (€1,000 * 130%) = 25% * €1,300 = €325	€1,300
Cultural	130%	25% * (€1,000 * 130%) = 25% * €1,300 = €325	€1,300
Environmental/Sports	140%	25% * (€1,000 * 140%) = 25% * €1,400 = €350	€1,400
Educational/Scientific	140%	25% * (€1,000 * 140%) = 25% * €1,400 = €350	€1,400

As shown in the table, a €1,000 donation can generate a deduction between €325 and €350, depending on the area. It is crucial for the taxpayer to obtain appropriate proof from the recipient entity specifying the nature of the donation, to ensure the correct application of the uplift factor.

Eligible Entities for Receiving Deductible Donations

It is not enough to donate to any entity to benefit from the tax incentive. Recipient entities must meet specific requirements for donations to them to be deductible for IRS purposes. Article 62 of the EBF, in conjunction with other legal provisions, lists the entities considered eligible. Among the most common are:

• Private Social Solidarity Institutions (IPSS): These cover a wide range of organisations that provide social support services, such as nursing homes, nurseries, day centres, associations supporting people with disabilities, etc.
• Non-Governmental Organisations (NGOs) with public utility status: Entities that pursue general interest objectives and have obtained public utility recognition.
• Museums, libraries, archives, and other cultural institutions: Provided they are public or private and recognised as being of cultural interest.
• Cultural foundations: Foundations whose main objective is the promotion of culture.
• Sports clubs and associations with public sports utility status: In accordance with the legal regime for sports.
• Universities, schools, and other educational institutions: Recognised by the Ministry of Education or Higher Education.
• Hospitals and scientific research centres: Entities that pursue health or scientific development objectives.
• Churches and other religious communities: Legally recognised in Portugal, for worship and assistance purposes.
• Environmental protection associations: Non-profit entities that develop environmental protection activities.

It is the taxpayer's responsibility to verify whether the entity to which they intend to donate is eligible. In case of doubt, it is advisable to request proof from the entity confirming its eligibility for the purposes of the Patronage Statute. The Tax and Customs Authority (AT) also provides lists of entities with public utility status or other relevant recognitions.

How to Declare Donations in the 2026 IRS

Correct declaration of donations is crucial to ensure the deduction. The process involves communication from the recipient entity to the AT and the subsequent inclusion of the amounts by the taxpayer in their IRS declaration.

Communication by the Recipient Entity

The entity receiving the donation has a legal obligation to communicate the received donations and the tax identification of the donors to the Tax and Customs Authority (AT). This communication must be made annually, by 31 January of the year following the one to which the donations relate, by submitting form 33. This communication is fundamental, as it allows the AT to pre-fill the data in the taxpayer's IRS declaration and validate the deductions made. Failure by the entity to make this communication may prevent the donor from claiming the deduction.

Filling in the IRS Declaration (Annex H of Form 3)

Eligible donations are declared in Annex H of Form 3 of the IRS declaration. In the "Tax Benefits and Deductions" section, the taxpayer must fill in the fields relating to donations. Normally, the values communicated by the entities are already pre-filled. However, it is always advisable to verify the accuracy of this data based on the donation receipts that the taxpayer should keep.

In Annex H, the taxpayer will find specific fields to indicate the NIF (tax identification number) of the beneficiary entity, the value of the donation, and its nature (social, cultural, environmental, etc.). The AT, based on this data and the information communicated by the entity, will apply the uplift factors and limits provided by law.

Retention of Proof

The taxpayer must keep all proof of donations made for a period of four years, in accordance with Article 123 of the Personal Income Tax Code (CIRS). This proof may be requested by the AT in case of inspection or doubt about the declared deductions. The proof must include, at a minimum, the full identification of the donor and the recipient entity, the value of the donation, the date, and its nature.

Special Cases and In-Kind Donations

In addition to monetary donations, legislation provides for the possibility of deducting in-kind donations, i.e., non-monetary assets such as real estate, works of art, equipment, etc. Article 66 of the EBF establishes the rules for valuing these donations.

In-Kind Donations

In-kind donations are deductible at their market value. However, determining this value often requires an assessment by an independent entity or specific criteria defined by law. For example, in the case of works of art, an assessment by a recognised expert may be necessary. It is essential that the recipient entity issues a document attesting to the value attributed to the donated asset. The lack of a correct assessment or proof may lead to the AT refusing the deduction.

Donations to Political Parties

It is important to clarify that donations to political parties, although regulated by specific legislation, DO NOT fall under the donation deduction regime provided for in the Patronage Statute for IRS purposes. The financing regime for political parties has its own rules and tax benefits, which are distinct from those applicable to donations to public utility entities.

Corporate Donations (IRC)

Although the focus of this article is IRS, it is relevant to mention that companies (corporate income tax payers) can also deduct donations made, following a similar regime, but with specificities. Article 62 of the EBF and the Corporate Income Tax Code (CIRC) provide for the deduction of expenses with donations for companies, with their own uplift factors and limits, which can be deducted from taxable profit.

Practical Examples of Donation Deductions

To illustrate the impact of deductions, here are some practical examples:

Example 1: Social Donation

• Taxpayer: João
• Cash donation to an IPSS: €500
• Type of donation: Social, 130% uplift
• João's IRS assessment: €2,500

Calculation:

1. Uplifted value of the donation: €500 * 130% = €650
2. Calculated deduction: €650 * 25% = €162.50
3. Maximum deduction limit (15% of the assessment): €2,500 * 15% = €375

In this case, the deduction of €162.50 is lower than the limit of €375, so João can deduct the full €162.50 from his IRS assessment.

Example 2: Environmental Donation with Limit Activated

• Taxpayer: Maria
• Cash donation to an environmental protection association: €2,000
• Type of donation: Environmental, 140% uplift
• Maria's IRS assessment: €1,000

Calculation:

1. Uplifted value of the donation: €2,000 * 140% = €2,800
2. Calculated deduction: €2,800 * 25% = €700
3. Maximum deduction limit (15% of the assessment): €1,000 * 15% = €150

In this scenario, although the calculated deduction is €700, Maria can only deduct €150, as this is the maximum limit allowed by law (15% of her IRS assessment).

Example 3: Cultural In-Kind Donation

• Taxpayer: Ana
• Donation of a work of art to an accredited museum: Market value assessed at €4,000
• Type of donation: Cultural, 130% uplift
• Ana's IRS assessment: €5,000

Calculation:

1. Uplifted value of the donation: €4,000 * 130% = €5,200
2. Calculated deduction: €5,200 * 25% = €1,300
3. Maximum deduction limit (15% of the assessment): €5,000 * 15% = €750

Ana can deduct €750 from her IRS assessment, as the calculated deduction (€1,300) exceeds the legal limit of 15% of the assessment.

Common Errors to Avoid in Donation Deductions

Despite being a beneficial tax incentive, donation deductions are often subject to errors that can lead to their rejection by the AT. It is crucial to be aware to avoid these pitfalls:

1. Donating to Ineligible Entities: One of the most frequent errors is making donations to associations or institutions that do not have public utility status or do not fall into the categories provided for in the EBF. It is essential to always verify the eligibility of the entity before making the donation.
2. Lack of Communication from the Entity to the AT: Even if the entity is eligible, if it fails to comply with its obligation to communicate received donations to the AT by 31 January of the following year, the deduction may be invalidated. The taxpayer should confirm whether the data appears pre-filled in their declaration.
3. Not Retaining Proof: The absence of valid and detailed proof of donations (receipts, entity declarations) can lead to the rejection of the deduction in case of an audit. Keep them for four years.
4. Not Considering the 15% Assessment Limit: Many taxpayers do not take into account the maximum limit of 15% of the IRS assessment, which can lead to incorrect expectations about the amount to be deducted. It is important to have an estimate of your assessment to understand the real impact of donations.
5. Incorrect Application of Uplift Factors: Applying an incorrect uplift factor (e.g., 140% instead of 130%) due to an incorrect interpretation of the nature of the donation, or the lack of specification in the proof, can lead to correction by the AT.
6. Donations to Political Parties: As mentioned, donations to political parties are not deductible under the Patronage Statute for IRS. This is a common misinterpretation.
7. Incorrect Valuation of In-Kind Donations: The valuation of donated in-kind assets must be carried out rigorously and, when required, by competent entities. Excessive valuation or valuation without documentary support may be challenged by the AT.

Conclusion and Final Recommendations

The deduction for donations in the 2026 IRS represents an excellent opportunity for taxpayers to support causes of public interest, while benefiting from a tax incentive. However, to fully benefit from this incentive, a thorough understanding of the rules and rigorous conduct in fulfilling tax obligations are imperative.

Practical Recommendations:

• Verify Eligibility: Before making any donation, always confirm whether the recipient entity is covered by the Patronage Statute and whether the type of donation falls into the upliftable categories. A search on the tax portal or contact with the entity itself can be useful.
• Request Detailed Proof: Always ask the recipient entity for a receipt or declaration, which includes your NIF, the value of the donation, the date, and, crucially, the nature of the donation (social, cultural, environmental, etc.) so that the correct uplift can be applied.
• Confirm Communication to the AT: At the beginning of the following tax year, verify whether the values of your donations appear pre-filled in your IRS declaration. If not, contact the entity so that it can regularise the situation with the AT.
• Be Aware of Limits: Keep in mind the 15% limit of the IRS assessment to avoid surprises. You can make an estimate of your annual assessment to get an idea of the potential benefit.
• Consult a Specialist: In the case of high-value donations or more complex situations (such as in-kind donations), consider consulting a certified accountant or a tax specialist. The investment can pay off in ensuring the correct application of the benefit and preventing errors.
• Stay Informed: Tax legislation may change. Regularly consult the publications of the Tax and Customs Authority and updates to the Tax Benefits Statute.

By following these recommendations, taxpayers can maximise their tax deductions and actively contribute to the social, cultural, and environmental development of the country. Patronage is a pillar of social responsibility, and the State, through these incentives, recognises and values the role of citizens and companies in this endeavour.

Call to Action (CTA): To ensure you benefit from all the deductions you are entitled to and avoid errors in your 2026 IRS declaration, we recommend seeking the support of a professional accountant. A certified accountant can help you analyse your tax situation, optimise your deductions, and ensure compliance with all legal obligations. Contact us for a personalised consultation!

Sources and Legal References

• Tax Benefits Statute (EBF): Articles 62, 63, and 66 (Tax regime for patronage)
• Personal Income Tax Code (CIRS): Article 123 (Document retention period)
• Corporate Income Tax Code (CIRC): Article 43 (Deduction of donations for companies)
• Ordinance No. 133/2005, of 8 February: Approves the model and filling instructions for the donation communication declaration (Form 33).
• Law No. 16/2001, of 22 June: Law on Religious Freedom (Section on recognition of churches and religious communities).