Did you know that IRS tax allocation (Consignação do IRS) allows you to support charitable organizations at no additional cost to you?
Since 2001, the Portuguese Tax and Customs Authority (Autoridade Tributária e Aduaneira – AT) has allowed taxpayers to allocate a percentage of their income tax to eligible organizations working in the social, cultural, religious, or environmental sectors.
Each year, the Tax Authority publishes an official list of organizations that qualify to receive these allocations, that you can check through this link.
If you would like to support a worthwhile cause through your tax return, this guide explains everything you need to know.
IRS Tax Allocation: Support a Good Cause Through Your Taxes
Every year, taxpayers are required to meet their tax obligations by filing an annual IRS return.
But what if part of your tax could be used to support a charitable organization instead?
That is precisely what the IRS Tax Allocation Scheme makes possible.
This option is cited in Article 152, nº 1 of the Portuguese Personal Income Tax Code (Código do IRS – CIRS), which states:
“An amount equivalent to 0.5% of the personal income tax assessed on the basis of the annual tax return may be allocated by the taxpayer to a public-benefit legal entity carrying out activities of a social, cultural or public-interest nature, as indicated in the tax return.”
In practical terms, allocating your IRS means directing 0.5% of the income tax assessed to an eligible organization of your choice.
This does not increase the amount of tax you pay or reduce your refund.
Instead, part of the tax that would otherwise be retained by the State is transferred to the organization you select.
As a result, you can support social, cultural, environmental, or religious causes without any additional financial cost.
How Can You Allocate Your IRS?
There are two ways to make your allocation.
Option 1 – Through the Portal das Finanças (until 31 March)
If you choose to make your selection before filing your tax return, you can do so through the Portal das Finanças.
Simply:
- Log in to the Portal;
- Select “Comunicar entidade a consignar IRS/IVA”;
- Search for the organization using its Tax Identification Number (NIF/VAT);
- Select the desired organization from the official list;
- Submit your choice.
Option 2 – When Filing Your IRS Return
Alternatively, you may choose the beneficiary organization while completing your annual IRS return.
To do so, complete Box 11 of the main IRS tax return (Modelo 3 – Face Sheet) with the requested information.
Taxpayers using Automatic IRS (IRS Automático) can make the allocation during the Pre-Liquidation (Pré-Liquidação) stage before submitting the return.
Information Required
Whether you make your selection before filing your return or during the submission process, you will need to indicate:
- The type of organization you wish to support;
- The organization’s Tax Identification Number (NIF);
- Whether you wish to allocate:
- IRS;
- VAT;
- or both, where applicable.
Which Organizations Can Receive IRS Tax Allocations?
The Portuguese Tax Authority publishes an annual list of eligible beneficiary organizations.
These include, among others:
- Private Social Solidarity Institutions (IPSS);
- Public-benefit legal entities;
- Cultural organizations with public-benefit status;
- Environmental organizations recognized as public-benefit entities;
- Religious institutions authorized to receive IRS allocations.
To ensure your chosen organization is eligible, consult the official list published annually by the Portuguese Tax Authority before making your selection.
A Simple Way to Make a Difference
Allocating part of your IRS is one of the easiest ways to support organizations that carry out valuable work in Portuguese society.
It costs you nothing, does not reduce your tax refund, and allows a small portion of your tax to benefit a cause you care about.
If you have not yet considered using the IRS Tax Allocation Scheme, it is a simple and effective way to contribute to organizations making a positive impact in your community.