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

For years "Portugal" in Dutch conversations about emigrating was almost a synonym for "favourable tax climate". That image is outdated, and whoever builds their decision to move on it is building on something that no longer exists.

The NHR regime is closed

The regime that made the reputation — Residente Não Habitual, with ten years of low rates and 10% on foreign pensions — was closed to newcomers from 1 January 2024 by the Portuguese budget act for 2024 (Lei 82/2023). There was a transitional arrangement for whoever had already taken demonstrable steps before the end of 2023, but that window has since closed too. Whoever moves now can no longer get in. Full stop.

The successor is narrow — and probably not for you

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

The conditions, though, are fundamentally different. The IFICI is there for specific cases: scientific research and higher education, certified start-ups, and highly qualified professions (think doctors, engineers, IT specialists, managers) — and then only with employers that themselves meet requirements, such as an export share of at least half of turnover. The application must moreover be in before 15 January of the year after you settle.

Foreign pensions don't fall under the IFICI advantage. 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 — retired, working remotely for a Dutch employer, or running a business outside the sector list — therefore usually does not qualify. If you think your profession and employer do fit, that's no do-it-yourself job: the lists of professions and sectors are in an implementing regulation and the assessment is exacting.

What does apply then

Without a special regime you fall under the normal Portuguese income tax (IRS): progressive brackets that in 2026 run from 12.5% to 48%, with a solidarity surcharge for high incomes on top. That isn't a punitive rate — it's simply a normal European tax system, comparable to what you're used to.

Between the Netherlands and Portugal there's a tax treaty (since 1999) that regulates which country may tax what, so that you don't pay twice. How that works out for you — pension, your own home, box 3 assets, working remotely — depends on your personal situation, and that's 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 don't move there "for the tax" on the basis of an article from 2019. That Portugal no longer exists, and whoever built their sums on it deserves to find that out before signing a rental contract — not at their first tax return.