Portugal's tax authority ended 2025 having formally written off a record €10.445 billion in unpaid taxes, fines and duties after concluding the money could no longer be collected, the highest figure in at least the last decade. "Written off" doesn't mean the debt disappears: it means the state has formally classified it as uncollectable after exhausting its collection efforts, even though the underlying legal debt may still exist. In practice, the tax authority considers these debts unlikely to be recovered.
To put that in perspective: Portugal's debt management agency, IGCP, set the state's gross financing needs for 2026, everything the government expects to borrow and refinance over the year, at €30.6 billion. The €10.445 billion written off alone is roughly a third of that. All the unpaid tax Portugal is owed, €27.949 billion, is nearly as large as an entire year of government borrowing.
The numbers
The figure comes from the Autoridade Tributária e Aduaneira's (AT) annual report on fighting tax fraud and evasion, delivered to Parliament this month. The €10.445 billion is what's known as "dívida declarada em falhas", debt formally written off because the AT exhausted every avenue to collect it and found no seizable assets or income to go after. That's up €681 million, or about 7%, from 2024.
The write-offs are only one part of Portugal's overall tax debt picture. Portugal's taxpayers owed €27.949 billion in total at the end of 2025, up 2.6% from the year before, roughly 9% of the country's €306.8 billion nominal GDP that year, and about 10% of Portugal's entire €274.8 billion national debt. Of that, €9.161 billion is still considered actively collectible, and €8.484 billion is suspended, tied up in court proceedings, insolvency cases, or formal disputes, on top of the €10.445 billion already written off, which alone comes to about 3.8% of the national debt.
Concentrated among a few
This isn't spread evenly across Portugal's taxpayers. According to the AT's report, roughly 20,000 large debtors account for 63% of all the debt written off as uncollectable, a relatively small group responsible for the bulk of the money the state will likely never see again. Those debtors include both companies and individuals, not one or the other.
Why debt gets written off, and what changed this year
Debt is formally declared uncollectable when the AT can no longer find the debtor, or has confirmed the debtor has no property or income left to seize. Under Portuguese law, these debts still legally expire ("prescrevem") eight years after the tax obligation arose, unless that clock is paused or interrupted, and this year, a change in the interpretation of Portugal's tax-prescription rules broadened the situations in which the limitation period can be suspended. The AT report attributes part of the growth in written-off debt to that change, and cites it as a reason legally-expired debt fell sharply, from €290 million in 2024 to €114 million in 2025, even as the uncollectable pile kept growing: debts that might once have simply expired are now staying on the books for longer instead.
The AT's own report pushes back on reading the write-offs as a sign of administrative failure. In most cases, the report says, both the debtor and the debt were identified in a timely way, this isn't primarily a story of the tax authority losing track of people. The debt becomes uncollectable because, by the time enforcement runs its course, the person or company has no seizable property, income, or assets left, there's literally nothing left to take, not because officials failed to find them.
Taken together, the figures point to three clear trends: Portugal's overall tax debt continued to grow, the amount classified as uncollectable reached a record high, and the amount disappearing through legal prescription fell sharply. Together, those trends leave the tax authority carrying an ever-larger stock of debt it considers unlikely to recover.