Is Portugal still the No.1 Tax Haven in Europe ?

Portugal has been considered Europe’s tax haven for expats

Brits retiring in Portugal have enjoyed preferential tax treatment for their pension income. However, Portugal’s new ruling party have recently announced an amendment to tax exemptions for foreign residents.

Are you affected?

If you’ve already moved to Portugal, and gained non-habitual resident status before 2020, you will not be affected. Those already resident in Portugal will continue to enjoy their tax exemptions for the period registered.

Is Portugal still a good option?

While Portugal continues to offer a favourable tax regime, the recent changes mean that instead of zero tax on foreign pension income, future residents will be taxed. A taxation of 10% will be applied to pension income sourced from outside of the country, including UK pension income.

The 10% tax rate remains a benefit, and is clearly much lower than Portugal’s normal marginal tax rates. If you’re looking for a financially efficient EU residence, Portugal still leads the way for tax planners.

Only time will tell if the introduction of tax will put off expatriates considering a move. It may not be as attractive for those with a modest pension income, but for high earners, continues to offer some tax incentives.

Read our Retirement Options guide to help decide what’s best for your retirement planning.

Is Portugal still the No.1 Tax Haven in Europe ?

Pension Transfer Personality Quiz

Take our free pension transfer personality quiz to find out if a pension transfer is right for you!

1 / 10

How would you describe your investment or financial planning experience?

I have never taken invested money in the markets, I don’t understand pensions and have no interest in financial planning

I take some interest in my planning and would like to explore my options

I have a keen interest in finances and the markets, and have some investment experience

2 / 10

Where will you live in retirement?

I will live in the UK and be a UK taxpayer

I am uncertain of where I will live, it could be abroad

I will not live in the UK in retirement

3 / 10

What sort of taxpayer will you be in retirement?

I will pay modest UK tax, with total income under £40,000 per annum

I will be a UK higher rate taxpayer

I will not be a UK taxpayer as I will live abroad

4 / 10

How would you describe your relationship with money and finances?

I have a poor relationship with money. I struggle to keep to a budget and tend to overspend.

I have a realistic attitude to money and finances. I save surplus income and live within my means. I take some interest in my finances.

I have a good relationship with money. I focus on long-term savings and take interest in my financial planning. I have a good understanding of pensions and am comfortable discussing financial topics.

5 / 10

Are your essential outgoings already covered by other retirement income?

No, my pension will be used for essential outgoings

Partly, I do have other sources of income for retirement

My essential outgoings will be covered by other income in retirement

6 / 10

Will anyone else be reliant on your pension for their financial security?

Yes, this will be the main source of income for our household in retirement

Partially, but my loved ones have other resources for their retirement

No one else is dependent on my pension income

7 / 10

When you retire, will you need to withdraw a lump sum?

I do not require a specific lump sum, but the option would be nice

I will need some funds at retirement

I want to take the maximum lump sum available

8 / 10

Do you require ad-hoc access to your pension funds in retirement?

No, a structured income would be enough

I would like the option to take ad-hoc withdrawals

I would like my pension to be flexible and allow ad-hoc withdrawals

9 / 10

How would your ideal retirement income be structured?

I want a guaranteed monthly income for life

I want some financial protection, with some flexibility

I want my pension income to be flexible and under my control

10 / 10

If you died, who would you want to benefit from your pension money?

I would like my spouse/civil partner to benefit from a pension income for their lifetime

I would like my spouse to benefit first, with money then left to children or other loved ones

I would like to have the flexibility to choose and change who benefits from my money

Only provide your details if you are happy for us to contact you about your planning

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Portugal has been considered Europe’s tax haven for expats

Are you affected?

Is Portugal still a good option?

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