The calculation of relevant years to benefit from the exemption under the new IRS Jovem regime, which came into force in January this year, has prompted many taxpayers to seek clarification from the Tax and Customs Authority (AT).
Many of these queries pertain to years when young individuals worked but still filed their taxes with their parents, periods when they stopped working due to unemployment or further studies, or how to integrate the new regime with previous IRS Jovem benefits already utilized.
These inquiries are submitted to the AT as requests for binding information, and since the beginning of the year, the tax authorities have published about twenty responses provided to taxpayers.
One of the latest responses released involves a 26-year-old who began working in 2024 and informed the AT of his intention to file his IRS as a dependent, seeking to understand if he could start availing of the IRS Jovem benefits in 2025.
The issue is significant for calculating beneficiary years, as the income exemption portion decreases over time, with 100% salary exemption in the first working year.
In this specific case, the AT noted that in 2025, the taxpayer would be in the second year of the IRS Jovem, as he earned more than the national minimum wage in 2024 (820 euros), which disqualifies him from filing as a dependent.
It is noted that the IRS Jovem exemption is capped at income equivalent to 55 times the Social Support Index (28,737.50 euros in 2025). Within this limit, the young individual benefits from total exemption in the first year of work. The exemption reduces to 75% from the second to the fourth year, 50% from the fifth to the seventh year, and 25% from the eighth to the tenth year of professional activity.
The benefit can be enjoyed for a maximum of 10 years, provided the worker is under 35 years old. Practically speaking, under the model’s rules effective in 2025, years worked and those with IRS filed independently are ‘discounted’.
Young individuals earning less than the minimum wage can choose to file as dependents or independently, a decision that now impacts their eligibility for the IRS Jovem. However, if they earn above the minimum wage and are over 25 years old, the choice is not available.
