Tax in Portugal: the paradise is closed (and what does apply)

Q: What does the treaty do with your pension?

Between the Netherlands and Portugal there is a tax treaty (since 1999) that governs which country may tax what. For pensions article 18 is pleasantly broad: pensions, annuities and social security payments (your AOW , that is) are taxable in the country where you live. But the second paragraph makes an exception that is no theory in Portugal's case. The Netherlands may still tax if three things apply at once: The accrual was tax-facilitated in the Netherlands: the contributions were deductible or untaxed. Portugal does not tax the payment at the ordinary rate for employment income (or taxes less than 90% of the gross amount). The total of your pensions and payments exceeds € 10,000 in a calendar year. An average Dutch occupational pension clears that third condition easily. The second is exactly why closing the NHR regime matters fiscally: under the ordinary rates there is precisely normal taxation. A pension from government service, the ABP part, is another story. Article 19 keeps it taxed in the Netherlands, unless you are both a resident and a national of Portugal. How the treaty works out for you depends on your personal situation: pension, own home, box 3 assets, remote work. That is exactly why one good conversation with a tax adviser who knows both countries belongs before your departure. Not after: a number of choices (keeping your home or not, what you do with pension pots) are expensive or impossible to repair afterwards.

The famous NHR regime has been closed to newcomers since 2024. Its successor (IFICI) is for a narrow group of professions — most Dutch emigrants simply fall under the normal Portuguese rates: nine brackets from 12.5% to 48%, with the return filed from 1 April to 30 June. And the treaty with the Netherlands has a € 10,000 threshold that touches your pension.

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Written and checked by Auke on 26 September 2026, against the sources at the bottom. Is something no longer right? Report it below and I'll fix it.

Whoever moves to Portugal now usually simply pays the Portuguese income tax, without a special regime. For years, "Portugal" in Dutch conversations about emigrating was almost a synonym for "favourable tax climate". That picture is outdated. Whoever builds their moving decision on it is building on something that no longer exists.

What does apply:

The ordinary Portuguese income tax, with nine brackets from 12.5% to 48%.
A return that runs every year from 1 April to 30 June.
A treaty with the Netherlands that, under conditions, still taxes your occupational pension above € 10,000 a year in the Netherlands.

The NHR regime is closed

The regime that made the reputation was called Residente Não Habitual: ten years of low rates. Foreign pension at first often stayed untaxed. From 2020 new participants paid 10% on it. It was closed to newcomers on 1 January 2024 by the Portuguese budget law for 2024 (Lei 82/2023). Whoever moves now can no longer get in.

The successor is narrow — and probably not for you

Something came in its place: the IFICI (Incentivo Fiscal à Investigação Científica e Inovação), popularly "NHR 2.0". On paper it sounds similar: a flat 20% on Portuguese employment income, for ten years, with exemptions for much foreign income.

The conditions, however, are fundamentally different. The IFICI is for specific cases:

scientific research and higher education;
certified start-ups;
highly qualified professions (think doctors, engineers, IT specialists, managers).

For that last group the employer must also meet a requirement: at least half of its turnover comes from exports. The registration must, moreover, be in before 15 January of the year after you settle.

Foreign pensions do not fall under the IFICI benefit. Whoever moves to Portugal in retirement pays the ordinary progressive rates on that pension — this is exactly the group the old regime attracted and that the new scheme deliberately keeps out.

An ordinary Dutch emigrant therefore usually does not qualify: retired, working remotely for a Dutch employer, or running a business outside the sector list.

If you think your profession and employer do fit, that is not a do-it-yourself job. The lists of professions and sectors are in an implementing regulation, and the assessment is strict.

Which rates do apply, then?

Without a special regime you fall under the normal Portuguese income tax, the IRS. Article 68 of the IRS code sets the brackets, and for 2026 they run like this:

Taxable income per year	Rate
up to € 8,342	12.5%
€ 8,342 – € 12,587	16%
€ 12,587 – € 17,838	21.5%
€ 17,838 – € 23,089	24.4%
€ 23,089 – € 29,397	31.25%
€ 29,397 – € 43,090	34.9%
€ 43,090 – € 46,566	43.1%
€ 46,566 – € 86,634	44.6%
above € 86,634	48%

That is no punitive rate. It is simply a normal European tax system, but no low-tax country either: the top rate starts at an income that in the Netherlands does not yet fall in the highest bracket.

You file the return electronically, and the law is precise about when: from 1 April to 30 June, regardless of whether that day is a working day.

What does the treaty do with your pension?

Between the Netherlands and Portugal there is a tax treaty (since 1999) that governs which country may tax what. For pensions article 18 is pleasantly broad: pensions, annuities and social security payments (your AOW, that is) are taxable in the country where you live.

But the second paragraph makes an exception that is no theory in Portugal's case. The Netherlands may still tax if three things apply at once:

The accrual was tax-facilitated in the Netherlands: the contributions were deductible or untaxed.
Portugal does not tax the payment at the ordinary rate for employment income (or taxes less than 90% of the gross amount).
The total of your pensions and payments exceeds € 10,000 in a calendar year.

An average Dutch occupational pension clears that third condition easily. The second is exactly why closing the NHR regime matters fiscally: under the ordinary rates there is precisely normal taxation.

A pension from government service, the ABP part, is another story. Article 19 keeps it taxed in the Netherlands, unless you are both a resident and a national of Portugal.

How the treaty works out for you depends on your personal situation: pension, own home, box 3 assets, remote work. That is exactly why one good conversation with a tax adviser who knows both countries belongs before your departure. Not after: a number of choices (keeping your home or not, what you do with pension pots) are expensive or impossible to repair afterwards.

The honest summary

Move to Portugal for Portugal: the climate, the pace, the cost of daily life that really is lower than in the Netherlands. But do not move there "for the tax" on the strength of an article from 2019. That Portugal no longer exists. Whoever built their sums on it deserves to find that out before signing a rental contract, not at their first tax return.

In Vertrekklaar this is phase 2 of 5 of the journey, step 2.4: the same steps, but for your situation — in your order, tickable, and with the deadlines watched. See the whole journey to Portugal or go straight to step 2.4 in the open roadmap.

What this means for your numbers →

What this rests on

The facts in this article come from these official pages. Rules change. When in doubt, go by the source, not this article.

Diário da República — Portaria 352/2024/1, the implementing regulation of the IFICI — diariodarepublica.pt
Portuguese tax authority — the IFICI FAQ (rate, registration deadline, export requirement) — info.portaldasfinancas.gov.pt
Portal das Finanças — IRS Code, article 72(12) (text until 2024), the NHR rate of 10% on foreign pension, introduced by Lei 2/2020 — info.portaldasfinancas.gov.pt
Treaty database — tax treaty Netherlands–Portugal (1999): article 18 with the € 10,000 threshold, and article 19 on government pensions — wetten.overheid.nl
Portal das Finanças — CIRS article 68: the IRS brackets and rates — info.portaldasfinancas.gov.pt
Portal das Finanças — CIRS article 60: the return from 1 April to 30 June — info.portaldasfinancas.gov.pt

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