Portugal Tax Guide for Foreign Nationals and Expats

Portugal usually considers you a tax resident if you spend 183 or more days in the country during a calendar year, or if you maintain a habitual residence that indicates the intention to live there long term. Tax residents are generally taxed on worldwide income, while non residents are taxed only on Portuguese sourced income.

Yes. Most tax residents must submit an annual tax return, known as the Modelo 3. Non residents must also file if they receive taxable income from Portuguese sources, such as rental income or employment.

The NHR regime, sometimes referred to in updated form as NHR 2.0, offers reduced tax rates and exemptions for certain categories of new residents who meet specific criteria. It can apply for up to 10 years, although eligibility rules have changed in recent reforms.

For tax residents, most UK private pensions are taxed in Portugal rather than the UK due to the Double Taxation Agreement. The rate depends on the type of pension and your overall income. State Pension rules differ, and some arrangements may be taxed at special rates.

Yes, Portugal typically taxes foreign investment income. Tax residents may pay up to 28 percent on dividends and interest unless they qualify for exemptions or reduced treatment under tax agreements or NHR.

Tax residents must declare worldwide rental income. Expenses may be deductible depending on the type of property and country involved. Non residents only declare rental income from Portuguese property.

Portugal does not operate a general wealth tax. However, the Additional to IMI (AIMI) applies to Portuguese property or property portfolios valued above €600,000. Rates generally range between 0.7 and 1 percent.

Capital gains from Portuguese property are taxable for both residents and non residents, although residents may include only 50 percent of the gain in taxable income. Gains from shares or other assets may also be taxable depending on residency and specific exemptions.

Property purchases may attract IMT (property transfer tax), stamp duty and ongoing annual property tax. The exact calculation depends on the value, use and type of property.

Portugal offers certain reductions or favourable rules for qualifying new residents under specific regimes. These can affect income tax, pensions and investment income.
Our separate guide on reduced taxes for expats in Portugal explains these options in detail.

Yes. A NIF (Portuguese tax number) is required for filing tax returns, opening bank accounts, signing rental agreements and most formal financial activities. It is usually one of the first steps expats take when relocating.

Retirees may benefit from reduced rates on pension income under certain regimes, depending on eligibility. Pension taxation varies based on residency, pension type and any double taxation relief that applies.

Most returns from savings, interest and investments are taxed at a flat rate of up to 28 percent. Some investments may be treated differently under NHR or international tax agreements.

Failure to declare required income or assets can lead to penalties, interest charges and loss of eligibility for certain tax benefits. Portugal participates in international reporting agreements, so overseas financial information may be shared with the authorities.

Portugal does not have a broad inheritance tax. However, stamp duty may apply to gifts or inheritances for beneficiaries who are not spouses, descendants or ascendants. Property transferred through inheritance may also have tax implications.