The tax authorities, who doesn't know them? Every country has its own tax authorities, so does Portugal. Are you moving and settling in Portugal? Then it is wise to take care of your emigration to Portugal still looking for information about taxes. People often assume that countries in the European Union have the same system regarding taxes, but this is certainly not the case. Also make sure that you arrange your tax affairs in the Netherlands properly before you emigrate.
Information about taxes in Portugal
Do you want to know more about taxes in Portugal, because you are going to emigrate soon? Then we hope that this article can help you a little. We have carefully put together the right information for you so that you know what to expect and what you can do about it.
Attractive tax residence
In addition to the nice weather, Portugal also has a particularly attractive fiscal climate. Good examples of this are the wealth tax and their gift and inheritance tax. Portugal does not have these (yet) and Portugal therefore does not levy any taxes on them. This is of course very attractive, especially for non-residents who want to emigrate.
Portugal Wealth Tax
Wealth tax is applied with exception and then with a limited levy on real estate. This is only in special circumstances. It also only comes into play for real estate with a value of more than € 600,000.00. This is a good reason for many foreign pensioners to leave for the sun in Portugal.
Gift and inheritance tax Portugal
As explained earlier, there is no gift or inheritance tax in Portugal. This means that parents can give tax-free gifts to their children and that children will receive everything tax-free in the event of inheritance.
NHR status
In Portugal, since 2009, there has been a regulation in force that applies to the "non-habitual" residents in Portugal. This is called the Residentes Nao Habituais, or the non habitual residents (NHR).
How does the NHR status work?
But how does this work exactly? When you move to Portugal and you meet the requirements, you are considered a resident of Portugal. This of course also means that you become liable to pay tax in Portugal for your worldwide income. You also have to pay tax in Portugal on your income from a third country.
Resident of Portugal
When exactly are you a resident of Portugal? This is when you stay in Portugal for more than 183 days in a year or when you have real estate at the end of the tax year. Of course, being a resident of Portugal also means that you are a tax resident.
Special status
The Portuguese government has special arrangements for certain groups, but you must meet the following conditions to qualify:
Terms and Conditions
There are 3 important conditions that you must meet if you want to obtain NHR status:
- That you have not been a taxpayer in Portugal for the past 5 years;
- That you are a resident of Portugal;
- The deadline for the application is March 31st and the procedure takes about 4 months. Therefore, apply on time.
How long is your NHR status valid?
If you meet the above conditions and get an NHR status, it will be valid for ten years. The period starts when you are registered with the Portuguese tax authorities.
Exemptions
When you get the NHR status you can enjoy exemption from for example pensions or annuities that you receive from abroad. Or even exemption from Portuguese income tax. There is also exemption for interest or dividends received from abroad.
Tax treaty Netherlands – Portugal
Because the two countries have a tax treaty, there are a number of things that one should take into account. It is not as easy as it seems. There are three important conditions that the Dutch state has. If you meet these, it means that pension and annuity payments are simply levied in the Netherlands.
Terms and Conditions NL:
- That you enjoyed tax benefits (premium deduction) in the Netherlands at the time you built up your pension or annuity;
- If you have received more than €10,000.00 per year in pension or annuity payments;
- That you pay tax in Portugal on less than 90% of your pension or annuity and are not taxed at the general rate.
When you read the conditions you will see that it is not as easy as you might have thought at first. It is the case that when Portugal does not levy tax on your pension or annuity from the Netherlands, the tax is simply levied in the Netherlands. As you have read before, Portugal does not have inheritance tax, but the Dutch state can still levy it 10 years after your departure. Check all this carefully so that you prevent accidentally paying double tax later.
Pension
If you receive a small pension, this is all still doable. Amounts up to €10,000.00 per year are transferred to Portugal. Larger pensions remain applicable for the Netherlands for levying tax. However, it is true that if no more than €33,000.00 per year is exceeded, the Netherlands only levies 8,95% tax. This is due to the fact that someone who no longer lives in the Netherlands does not have to pay national insurance contributions.
Portugal Tax Rate
| Income tax | 11%-45% |
| Real estate wealth tax | 0,2%-0,5% |
| Sales tax | 21% |
| Corporate tax | 12.5% up to €12,500.00 and above 25% |
| Transfer tax | 7% – depending on value |
| Inheritance tax | 0% |
Portugal also levies tax on the profit on the sale of (holiday) homes. Here, of course, the fiscal value is taken into account.
Finally
So it is not only good to look at how you qualify for the NHR status before your emigration, but also to read the Dutch law carefully. If you do not do this, the consequences can be very unpleasant.
Do you need more information regarding your emigration to Portugal? Then we would like to refer you to the other articles on our website!
This article has been written with care and is of an informative nature.
