IRS Jovem – A New Tax Benefit?

This paper analyses the IRS Jovem regime, questioning whether it constitutes a new tax incentive. It is necessary to consider both the legal definition, set out in the Estatuto dos Benefícios Fiscais, and the doctrinal definition of a tax incentive. In an initial phase, Portuguese scholarship adopted a conceptualist approach, aiming to systematise the then recent legislative act that codified tax benefits in Portugal. Meanwhile, the notion of extrafiscality marked a turning point in the interpretation of the concept of tax benefit, emphasising the perspective that frames tax benefits as instruments of public policy. The analysis of the IRS Jovem regime, its evolution, and its comparison with similar schemes, supports its qualification as a tax benefit. As such, its admissibility must be assessed in light of substantive constitutional principles, namely: the principle of legality, the principle of ability to pay, the principle of progressivity, and the principle of the Social State.

Keywords: IRS Jovem, tax incentive, extrafiscality, ability to pay principle