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Expat Tax Guide: Portugal 2026

By Taxpert Editorial · Last reviewed: 26 April 2026

Moving to Portugal — or already there — and wondering how Portuguese income tax works for foreign residents? This guide covers tax residency rules, what income is taxable, and the special regimes available to new residents.

Becoming a Portuguese tax resident

You become a Portuguese tax resident when either of these conditions is met:

• You spend 183 or more days in Portugal in a calendar year (consecutive or not), or
• Your habitual residence — the place where you habitually live — is in Portugal on 31 December of that year.

Once you are a tax resident, you pay IRS on your worldwide income — not just income earned in Portugal. This is the key difference from non-resident status, where only Portuguese-source income is taxable.

Your first tax year in Portugal

The year you arrive can be complex. For part-year residency, Portugal generally taxes you as a resident from the date you established residency, not from 1 January. You may have split obligations between Portugal and your previous country. A certified Portuguese accountant (TOC) is worth consulting for the transition year.

Before you can file taxes, you need a NIF (Número de Identificação Fiscal) — a Portuguese tax number obtained from AT or a local Finanças office. EU/EEA citizens can apply directly; non-EU residents typically need a fiscal representative.

Special regimes for new residents

Portugal has historically offered special tax regimes for people who move there. Currently, two regimes are relevant to new residents:

IFICI (NHR 2.0) — open from 2024

IFICI — Incentivo Fiscal à Investigação Científica e Inovação — is the current special regime for qualifying professionals and researchers. It grants:

• A 20% flat income tax rate on qualifying Portuguese-source Cat. A and Cat. B income
• Valid for 10 consecutive years from registration
• Foreign income in Cat. A, B, E, F, G exempt under double-taxation treaty conditions

IFICI is activity-gated: AT must approve your application confirming your role qualifies — R&D roles, research positions, or highly-qualified functions at exporting companies with eligible CAE codes. It is not self-certifying.

Foreign pensions under IFICI are taxed at standard progressive rates — unlike NHR Legacy, which provided a 10% flat rate on foreign pensions.

NHR Legacy — closed to new applicants

NHR Legacy was closed to new applications on 31 December 2023. If you were registered before that date, you retain the benefits for the rest of your 10-year window. NHR holders receive 20% on qualifying PT-source income and 10% on foreign pensions.

Foreign income treatment

Under standard IRS (no special regime), foreign income is generally taxed at the progressive rates alongside Portuguese income. Double-taxation treaties with most countries allow you to credit foreign taxes paid against your Portuguese liability.

Under IFICI or NHR, foreign income in categories A, B, E, F, and G is typically exempt from IRS in Portugal, provided the income may be taxed in the source country under a double-taxation treaty. This exemption is one of the key attractions for expats with foreign-source business or investment income.

Double-taxation treaties

Portugal has treaties with over 80 countries, including the UK, US, Germany, France, and most EU member states. These treaties determine which country has the right to tax specific income types and allow residents to avoid being taxed twice on the same income.

Claiming treaty benefits on your Portuguese return requires AT confirmation of your residency status and documentation from the foreign tax authority.

Practical steps for new residents

1. Obtain a NIF from AT or a Portuguese Finanças office.
2. Establish tax residency by registering your address with AT.
3. If you may qualify for IFICI, apply via AT before the relevant tax year ends.
4. File your first Modelo 3 return (1 April – 30 June) for the prior tax year.
5. For the transition year and treaty questions, engage a certified Portuguese accountant (TOC).

Frequently asked questions

Do I pay Portuguese tax on worldwide income as an expat?

Once you become a Portuguese tax resident — by spending 183+ days in Portugal in a calendar year, or by maintaining habitual residence on 31 December — you are taxed on worldwide income, not just Portuguese-source income. Non-residents are taxed only on Portuguese-source income. Double-taxation treaties and the Foreign Tax Credit (Art. 81 CIRS) prevent most double taxation.

Can I still apply for NHR Legacy in 2026?

No. NHR Legacy closed to new applicants on 31 December 2023. If you registered before that date, you keep the benefits for the remainder of your 10-year window. New residents should evaluate IFICI (NHR 2.0) — it offers a 20% flat rate on qualifying Portuguese-source Cat. A/B income but, unlike NHR Legacy, does not provide a 10% flat rate on foreign pensions.

What income is exempt under IFICI for new expats?

Under IFICI, foreign-source income in Categories A (employment), B (self-employment), E (investment), F (rental), and G (capital gains) is generally exempt from Portuguese IRS, provided the income may be taxed in the source country under a double-taxation treaty. Portuguese-source qualifying Cat. A/B income is taxed at a flat 20%. Foreign pensions are not exempt and are taxed at standard progressive rates under IFICI.

How are foreign pensions taxed for expats in Portugal?

Under standard IRS or IFICI, foreign pensions are Category H income taxed at the progressive scale. Under NHR Legacy (closed to new applicants), foreign pensions are taxed at a flat 10% for the duration of the 10-year window. The Foreign Tax Credit can offset foreign tax paid on pensions, and treaty allocation rules may grant exclusive taxing rights to one country for government pensions.