Portuguese government announces expat pensions to be tax exempt

Published:  20 Dec at 6 PM
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In a move designed to attract more retirees to the country, the Portuguese government has announced that expat pensions will no longer be subject to income tax.

Those who will benefit the most are retirees who spend at least part of the year in the country and are non-habitual residents for Portuguese tax purposes. The pension itself must be occupational and originate from a foreign source, and the new law means that pensions paid from countries which have tax treaties with Portugal will not attract income tax during the recipient’s time in the country.

Portugal’s motive behind the new tax law is to gain an advantage in the increasingly competitive world of retiree destinations, and isn’t the first ‘carrot on a stick’ to emerge from popular expat locations. Spain recently introduced citizenship for purchasers of property valued at over £130,000, and other countries have introduced tax breaks.

Given the present state of the economies of Portugal, Spain, Greece and Cyprus, all favourite locations for expat retirees, and the shrinking tourism revenues resulting from the continuing economic crisis, it’s no surprise that Mediterranean destinations are resorting to the retiree version of the special offer. Potential expats, however, may need a crystal ball to determine the best long-term deal.
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Comments » There is 1 comment

Andy Fransen wrote 7 years ago:

This is so very misleading. Expats within the EU community already pay just one time tax in any of the countries that have a tax agreement. This would also be on your state pension. On top of this the criteria is that you have to be a NON resident. As an Expat you CANNOT be taxed on the income gained in a foreign country anyway, if your primary residence is outside of Portugal. So some one please explain to me the good news here.

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