Portugal has published Regional Legislative Decree No. 17/2026/M, lowering personal income tax rates in the Autonomous Region of Madeira for income earned in 2026, with the changes taking effect retroactively from 1 January 2026.

RF Report

Portugal has reduced personal income tax rates for the first six taxable income brackets in the Autonomous Region of Madeira, with the changes applying to income earned in 2026 and taking effect retroactively from 1 January 2026.

Regional Legislative Decree No. 17/2026/M of 5 November 2026 was published in the Official Gazette. It amends Article 2 of Regional Legislative Decree No. 3/2001/M to reflect national updates to Article 68 of the personal income tax (IRS) Code, with the stated aim of increasing disposable household income across Madeira and Porto Santo.

Why the rates changed

The amendments follow the broader reduction in the general rates for the first six taxable income brackets in Portugal under Decree-Law No. 212/2026 of 4 November 2026. Madeira applies the 30% rate reduction allowed in the region, which is the maximum legal limit for regional tax differentials. The decree therefore lowers the rates applicable in Madeira accordingly.

Revised rates

The first six brackets are cut, while the top three remain unchanged:

  • Up to EUR 8,342: 8.54% (down from 8.75%)
  • Over EUR 8,342 up to EUR 12,587: 10.64% (down from 10.99%)
  • Over EUR 12,587 up to EUR 17,838: 14.49% (down from 14.84%)
  • Over EUR 17,838 up to EUR 23,089: 16.52% (down from 16.87%)
  • Over EUR 23,089 up to EUR 29,397: 21.42% (down from 21.77%)
  • Over EUR 29,397 up to EUR 43,090: 24.22% (down from 24.43%)
  • Over EUR 43,090 up to EUR 46,566: 30.17% (unchanged)
  • Over EUR 46,566 up to EUR 86,634: 31.22% (unchanged)
  • Over EUR 86,634: 33.60%(unchanged)

Average rates

Based on annual taxable income (rendimento coletável), the average rates for the 2026 brackets are as follows:

Taxable income (EUR) Normal rate Average rate
Up to 8,342 8.54% 8.540%
Over 8,342 up to 12,587 10.64% 9.248%
Over 12,587 up to 17,838 14.49% 10.791%
Over 17,838 up to 23,089 16.52% 12.094%
Over 23,089 up to 29,397 21.42% 14.095%
Over 29,397 up to 43,090 24.22% 17.313%
Over 43,090 up to 46,566 30.17% 18.272%
Over 46,566 up to 86,634 31.22% 24.261%
Over 86,634 33.60% –

Approval timeline

The Legislative Assembly of Madeira passed the decree in plenary on 27 October 2026. The Representative of the Republic signed it on 3 November 2026, and it was published on 5 November 2026.