Compensation paid to victims of abuse in the Catholic Church is now exempt from Portuguese income tax
Law 40/2026, published in the official gazette on Monday, excludes from personal income tax the financial compensation awarded to victims of sexual abuse that occurred in the context of the Catholic Church in Portugal or in similar contexts.
Law 40/2026 was published in Portugal’s official gazette on Monday. It excludes from personal income tax, known here as IRS, the financial compensation awarded to victims of sexual abuse that occurred in the context of the Catholic Church in Portugal or in similar contexts.
The effect is straightforward. Anyone receiving such compensation keeps the full amount, and it does not count as taxable income. The wording chosen by parliament is deliberately broad — it refers to similar contexts, not only to the Catholic Church — so that reparation schemes set up by other institutions in equivalent circumstances are covered too.
Why this became a question
Once the Portuguese Catholic Church began awarding financial compensation to victims through the body set up for that purpose, it was never settled how the tax authority should treat those sums. According to the criteria published by the group that assesses the applications, awards fall between nine thousand and 45 thousand euros per case.
Without an explicit rule, each payment sat in a grey area. It could be read as non-taxable damages, or as income that had to be declared. For victims, the gap between those two readings could mean losing a meaningful share of money that exists precisely as reparation.
The law closes that question. It does not create the right to compensation, which still depends on the mechanism that awards it, and it does not set amounts. It simply establishes that the state does not take a cut of what is paid.
The wider picture
The text joins a run of recent changes to how the state handles reparation claims. In July it was decided that claiming damages from the state will no longer require going to court, a simplification with the same underlying logic: less friction for people who have already been through a difficult process. Published on the same day was the law strengthening firefighters’ rights.
The full text is available in the Diário da República.
This is a sensitive subject. Anyone affected by abuse can seek support through the victim support lines available in Portugal.
Image: Concepcion AMAT ORTA / Wikimedia Commons (CC BY)
