The Azores do not have a tax table. They have a formula.
Madeira writes its own IRS table into its budget every year. The Azores never do. A regional decree from 1999, in its current wording in force since 2022, says one thing:
the national IRS rates in force in each year are reduced by 30%. That single sentence is the entire regional tax system for salaries.
The consequence people miss: the cut floats. When the 2026 budget law rewrote the national scale, all nine Azorean rates moved the same day, automatically, with no vote in Ponta Delgada. The first bracket runs at 8.75% against the mainland’s 12.5%; the top rate is 33.6% against 48%, from the same €86,634 threshold. Bracket limits, the two-column method, deductions, credits, IRS Jovem, IFICI: all national, all unchanged. Only the rates shrink.
The surcharge is where the Azores beat Madeira
On the bracket scale the two archipelagos are identical. The one numeric divergence sits above €80,000 of taxable income, where Portugal charges its additional solidarity rate. Because the Azorean rule cuts all national IRS rates, the surcharge falls too: 1.75% up to €250,000 and 3.5% beyond, where Madeira applies the full national 2.5% and 5%. Under the threshold, picking between the islands on tax grounds is a coin toss. Over it, the Azores win on every euro.
Nobody has printed the resulting table. Including the government.
Portugal’s two-part method taxes the lower slice of your income at a printed average rate, column B of the table. The Azores have no printed column B: the tax authority’s own rate leaflets show only the reduction rule for the region. So we derive it, multiplying the national column by 0.7. Every product terminates cleanly at four decimals, so there is no rounding choice to make, and the deduction amounts published by PwC for the Azores reproduce from our column exactly. The residual risk is the liquidation software rounding a step its own way, a cents-level effect disclosed in the calculator’s limitations. Madeira, which prints its own roundings, can sit about a thousandth of a percentage point away from the strict formula on one bracket.
Residency follows you, not your employer
You are an Azores resident for IRS when you spend more than 183 days of the tax year in the region, with your habitual home there and your tax registration there. The regional rule applies to residents regardless of where they exercise their activity: a developer in São Miguel invoicing a Lisbon or foreign employer gets the reduced scale on that salary in full. Proof, when asked, is a residence certificate from the tax authority.
Take €40,000 gross in Ponta Delgada, single, no children. Social security takes €4,400, the specific deduction removes €4,587, leaving €35,413 of taxable income. The Azorean scale charges about €5,704 of IRS where the mainland scale charges €8,149 on the identical base: precisely the formula at work, and roughly €2,445 a year that stays on the island with you.
What changed in 2026
The national scale changed, so the Azorean one followed: the 2026 budget law reset all nine national rates, and the formula repriced the region overnight. That is the change. The rule’s vigency for 2026 is not an assumption: the February dispatch approving this year’s regional withholding tables and the tax authority circular distributing them both cite the reduction decree in their opening lines. One honest caveat for low earners: the minimum-existence relief takes the first-bracket rate as an input, and whether the authority feeds it the reduced regional rate has not been verifiable anywhere official, so the calculator applies the national parameters there.