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Category H — Pension Income
Pension income. Taxed at progressive rates with a pension-specific deduction. Foreign pensions under NHR were taxed at 10%.
Legal basis: Art. 11 CIRS; Art. 72(12) CIRS (NHR Legacy pensions)
Category H (Categoria H) covers all pension income including old-age pensions, early retirement pensions, disability pensions, and survivor pensions from both Portuguese and foreign sources. Portuguese-source pensions are taxed at progressive IRS rates after applying a specific pension deduction (up to €6,430 in 2026, phased out for higher pensions). Foreign-source pensions held under NHR Legacy were taxed at a flat 10% — a major attraction of the old regime. Under IFICI (NHR 2.0), foreign pensions no longer receive this preferential rate and are subject to standard progressive brackets. Married pensioners may benefit from income splitting (quotient conjugal) when filing jointly.
Example
A retiree with a UK pension of €30,000 under NHR Legacy paid €3,000 (10%). Under IFICI, the same pension would be taxed at progressive rates — potentially €5,000–€8,000 depending on other income.
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