Deducting Expenses on IRS: e-Fatura, Supermarkets, Rent, and Healthcare

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You moved to Portugal, someone told you to give your NIF at every checkout, and now you have a year of receipts and no idea what any of them are worth. This guide explains how IRS expense deductions work through e-Fatura. It covers supermarket and general spending, restaurants and other VAT-back categories, rent and healthcare, so you can claim what you are owed.

How IRS Expense Deductions Work for Expats in Portugal

In my first year in Lisbon I recited my NIF at every pharmacy and café because a neighbour told me to. I had no idea what happened to those numbers afterwards. It turns out they feed a system that can lower your tax bill. It only works, though, if you understand the rules behind it and check your records before you file.

Deductions Reduce Your Tax, Not Your Income

In Portugal, IRS means the personal income tax, Imposto sobre o Rendimento das Pessoas Singulares. It has nothing to do with the American tax agency. Most of the everyday deductions here are “deduções à coleta.” They come off the tax you owe after the tax has been calculated. They do not reduce your taxable income.

That has one practical effect. A deduction only helps if you actually owe Portuguese tax. A retiree whose income is mostly exempt, or a newcomer with a tiny Portuguese tax liability, may collect perfect invoices all year and see little change in the final figure.

If you are still working out whether Portugal taxes you at all, start with Becoming a Tax Resident in Portugal: The 183-Day Rule Explained.

Why the NIF on Every Receipt Matters

Every business in Portugal reports its invoices to the tax authority. When an invoice carries your NIF, it lands in your personal e-Fatura account. The system then sorts it into a deduction category based on the merchant’s registered business activity.

No NIF on the invoice means the expense does not exist as far as your tax return is concerned. You cannot add it afterwards. For the full story on why cashiers ask “contribuinte?”, see e-Fatura guide: Why cashiers ask for your NIF at the supermarket.

Here is a practical tip. When the cashier asks “Quer contribuinte?”, say “Sim, por favor” and either read your number aloud or show it on your phone. Self-checkout machines at Continente and Pingo Doce usually have a button for adding it before you pay. For more on this habit, see Getting your NIF printed on your supermarket receipt for IRS tax benefits.

Who Counts as Your Household

Some caps apply per taxpayer, called the sujeito passivo. Others apply per household, called the agregado familiar. This distinction matters a great deal for couples and families.

Married couples and couples in a união de facto can file jointly or separately. The choice affects how the totals are calculated, so run the simulation on Portal das Finanças both ways before you submit.

Children and other dependants usually need their own NIF on invoices if you want their expenses to count. Get them a NIF early. Keep in mind that a toddler’s paediatric bills only help if they are linked to the child’s number or yours, depending on how the category treats dependants.

What Deductions Do Not Cover

These expense deductions are about consumption: groceries, rent, doctors, school costs and haircuts. Investing is a different part of the return.

Buying ETFs through Trade Republic does not generate a deductible expense. Neither does buying crypto on Binance. Gains and income from those accounts are declared separately, often in Anexo J when the platform is based abroad, and they follow their own rules.

Keep the two worlds apart in your head. Your e-Fatura dashboard will never show your brokerage activity, and it is not supposed to.

e-Fatura Step by Step: Checking and Classifying Your Invoices

The e-Fatura portal is where you see, correct and confirm the invoices behind your deductions. It is not pretty, and parts of it are only in Portuguese. Still, twenty minutes a few times a year saves a lot of regret. If the main tax site is new to you, see The Portuguese Tax Authority Portal (Portal das Finanças).

Logging In and Finding Your Invoices

Follow these steps:

1. Go to Portal das Finanças and log in with your NIF and password, the senha de acesso. Alternatively, use Chave Móvel Digital if you have set it up.
2. Search for “e-Fatura” and open the consumer area, the area for “Consumidor”.
3. Open the section that lists your invoices. Filter by year.
4. Look at the summary by deduction category. It shows how much has been assigned to general family expenses, health, education, housing and the VAT-back categories.
5. Open the list of invoices marked as pending, “pendentes”. These need your input.

Pending Invoices and Merchants With Mixed Activities

Some merchants are registered under more than one activity. When that happens, e-Fatura cannot know which category your purchase belongs to.

A pharmacy is the classic case. You might buy prescription medicine and sunscreen in the same visit. An optician, a supermarket with an in-store pharmacy counter, or a gym that also offers physiotherapy can all produce pending invoices.

For each pending invoice, you choose the category that matches what you bought. You can also mark it as not relevant for deductions if it was a business purchase or simply does not fit.

Be honest here. The authority can ask for proof, so keep the paper receipt or a photo of it whenever you assign something to health or education.

Pending invoices that you never classify may end up treated as general expenses, or ignored for the more valuable categories. The validation window falls early in the year, so check the exact dates on Portal das Finanças. Put a reminder in your calendar.

A Yearly Routine That Keeps You Out of Trouble

This is the routine I follow and recommend to friends:

1. In spring, summer and autumn, open e-Fatura briefly. Scan for invoices that are missing or wrongly assigned while you still remember the purchases.
2. Before the validation window closes, classify every pending invoice. Check that your landlord’s rent receipts appear.
3. When the IRS filing period opens, look at the deduction values pre-filled in your declaration and compare them with your own records.
4. Run the simulation as individual and, if you are a couple, as joint filers.
5. Submit only once the numbers make sense. For the filing mechanics, see Filing the Annual IRS Tax Return (Modelo 3): Deadlines and Process.

Supermarkets and General Family Expenses

Groceries, clothing, electricity, water, phone bills and most everyday shopping fall into general family expenses, “despesas gerais familiares.” This is where most of your NIF habit pays off.

The 35 Percent Rule and the Caps

As of October 2026, the rules on Portal das Finanças under article 78.º-B of the Código do IRS are as follows. The general family expenses deduction is 35% of the amount you actually spent, the valor suportado. It applies to invoices carrying your NIF from any sector not covered by a specific deduction category.

The cap is €250 per taxpayer. A married or de facto couple can therefore reach €250 each, or €500 together. Single-parent families get a higher rate of 45%, capped at €335.

The percentage applies to the full amount you paid, VAT included. It is not limited to the tax portion of the invoice. That is why ordinary supermarket runs add up so quickly.

Worked Examples for Singles, Couples and Single Parents

A single person. Sarah is a single remote worker living in Arroios. She spends €2,000 a year on groceries, clothes and utility bills, all with her NIF. 35% of €2,000 is €700, but her deduction stops at the €250 cap. She hits the ceiling once her qualifying spending passes roughly €715.

A couple in Porto. Tom and Ana live in Porto and each spends enough to pass the threshold on their own NIF. Together they reach €500.

There is a catch here. If Tom puts every supermarket shop on his NIF, he maxes out at €250 while Ana’s allowance goes unused. Couples should spread everyday spending across both numbers.

A single parent. Miguel is raising his daughter alone. He gets 45% of his qualifying spending, capped at €335. He reaches that cap at roughly €745 of spending.

Household type	Rate on amount spent	Cap	Approximate spending needed to reach cap
Single taxpayer	35%	€250	About €715
Married or de facto couple	35%	€250 each, €500 together	About €715 each
Single-parent family	45%	€335	About €745

The lesson is simple. For most working adults, the general family expenses cap fills up within the first few months. The more valuable work is getting the right invoices into the specific categories.

Restaurants, Car Repairs, Haircuts and Culture: The VAT-Back Categories

There is a separate deduction that rewards spending in certain sectors with a share of the VAT you paid. People sometimes call it the “IVA” deduction. In e-Fatura it appears as its own block, distinct from general family expenses.

What Qualifies

As of October 2026, the rules on Portal das Finanças under article 78.º-F of the Código do IRS let you deduct 15% of the VAT paid on invoices carrying your NIF in these sectors:

• Car and motorbike repair.
• Accommodation and restaurants.
• Hairdressers and beauty salons.
• Veterinarians.
• Specialist bookshops, added by Lei 73-A/2025.
• Theatre, music, dance and other artistic activities, also added by Lei 73-A/2025.
• Show venues, libraries, museums and historic sites, also added by Lei 73-A/2025.

The base is the VAT shown on the invoice, not the total bill. Suppose your restaurant invoices across the year show €100 of VAT. Your deduction from that spending is €15.

Dinner at a tasca in Alfama, a haircut in Cedofeita, a vet visit for your dog in Cascais and a museum ticket in Belém all count. They only count if your NIF is on the invoice, so ask every time.

How the Household Cap and Public Transport Fit Together

The VAT-back deduction is capped at €250 per household, the agregado familiar. This cap is not per person. A couple filing jointly shares one €250 ceiling across all these sectors.

Public transport has a stronger rule. You can deduct 100% of the VAT on public transport monthly passes or tickets. Those amounts count towards the same €250 household cap.

If you buy a monthly pass in Lisbon or an Andante card in Porto, ask for the invoice with your NIF when you load it. Many ticket machines and apps allow this. At a counter, simply ask.

Category	Base	Rate	Cap
Car and motorbike repair	VAT paid	15%	€250 per household, shared
Accommodation and restaurants	VAT paid	15%	€250 per household, shared
Hairdressers and beauty salons	VAT paid	15%	€250 per household, shared
Veterinarians	VAT paid	15%	€250 per household, shared
Specialist bookshops, arts, show venues, libraries, museums, historic sites	VAT paid	15%	€250 per household, shared
Public transport passes and tickets	VAT paid	100%	€250 per household, shared

Rent and Housing Deductions

Rent can be one of the more meaningful deductions for expats. It is also the one most often derailed by informal landlords. The deduction applies to rent paid on your permanent home, your habitação própria e permanente, under a proper lease.

The exact percentage and cap are set in the IRS Code. They have changed in recent budgets, so check the current values on Portal das Finanças before you plan around them.

What You Need From Your Landlord

For rent to appear in your deductions, three things must be true:

1. The lease must be in writing and registered with the tax authority by the landlord. See Registering your rental contract with Finanças: Why your landlord must do it.
2. The landlord must issue electronic rent receipts, the “recibos de renda eletrónicos,” through Portal das Finanças. Some landlords are exempt from issuing them electronically and instead declare the rent in an annual statement.
3. Your NIF must be on the contract as the tenant. If two people rent together, both should ideally be named.

If your rent does not show in e-Fatura or your housing deduction area by the start of the year, talk to your landlord. Be polite but specific. A landlord who refuses to register the contract is not just costing you a deduction. It is also a warning sign about your legal position as a tenant.

Paying Rent From Abroad and Keeping a Paper Trail

Many newcomers pay their first months from a foreign account. Often this is because their Portuguese bank account is not open yet.

Sending the euros through Wise to the landlord’s IBAN keeps a clean record with the date, amount and recipient. That record is useful if a receipt is missing and you need to show what you paid. Whatever method you use, write the month in the payment reference so each transfer matches a receipt.

Keep your contract, every transfer confirmation and a screenshot of each electronic receipt in one folder. If Finanças ever asks about your housing deduction, you will have everything ready in five minutes.

Healthcare Expenses

Health is a valuable category. It covers a share of what you spend on doctors, hospitals, dentists, diagnostic tests, pharmacy medication and health insurance premiums.

The deduction is a percentage of eligible spending with a cap. Both are set in the IRS Code, so confirm the current values on Portal das Finanças.

Pharmacies, Prescriptions and Private Consultations

Invoices from clinics, hospitals such as CUF or Hospital da Luz, labs and dentists usually go straight into the health category.

Pharmacies are trickier. Items sold at the reduced VAT rate, which covers most medicines, count as health automatically. Standard-rate items, such as some supplements or medical products, count only when they come with a prescription.

When you buy a standard-rate item on prescription, keep the prescription (receita) number. Assign the invoice to health in e-Fatura and file the prescription with your records. For how prescriptions work in practice, see Pharmacies and Medication in Portugal: Prescriptions and OTC Drugs.

Here is a typical scenario. You buy antibiotics, a nasal spray and a bottle of shampoo in one visit to a farmácia in Campo de Ourique. The invoice may arrive as pending. You may need to split it mentally: the medicine is health, and the shampoo belongs elsewhere. If the system only allows one category per invoice, ask the pharmacy to ring up personal-care items on a separate invoice next time.

Health Insurance Premiums and Foreign Medical Bills

Private health insurance premiums paid to an insurer that reports to the Portuguese tax authority can count towards health. This applies to policies from Médis, Multicare or similar Portuguese insurers.

International policies are less straightforward, because the insurer may not report to Finanças at all. For details, see Can expats deduct private health insurance premiums on their IRS tax return?.

Medical bills paid abroad will not appear in e-Fatura. Whether you can declare them manually, and how, depends on your situation. This is exactly the kind of question worth putting to a professional. See Finding a reliable English-speaking Contabilista for your complex IRS return.

Education is a separate category with similar logic. It includes school fees, registered tutoring and some school materials. For whether international school fees qualify, see Are international school tuitions tax-deductible in Portugal?.

Deduction category	How the amount is calculated	Cap	Where it is checked
General family expenses	35% of amount spent, 45% for single-parent families	€250 per taxpayer, €335 for single-parent families	e-Fatura
VAT-back sectors	15% of VAT paid, 100% for public transport	€250 per household, shared	e-Fatura
Rent on permanent home	Percentage of rent set in the IRS Code	Set in the IRS Code, check Portal das Finanças	Rent receipts and IRS declaration
Health	Percentage of eligible spending set in the IRS Code	Set in the IRS Code, check Portal das Finanças	e-Fatura
Education	Percentage of eligible spending set in the IRS Code	Set in the IRS Code, check Portal das Finanças	e-Fatura

Start small. Give your NIF everywhere, spread spending between partners, and check e-Fatura before the validation window closes. Those three habits alone usually make the difference between a disappointing return and one that reflects what you actually spent living here.

Disclaimer

This article is for general informational purposes only and does not constitute professional advice. Laws, prices and regulations vary by location and change over time. Consult a qualified professional for guidance on your specific situation.