Avoiding Double Taxation in Portugal
The double taxation treaties, the tax residency certificate, the withholding relief forms, and the foreign tax credit.
Last verified: September 2026.
Who this is for
- Portuguese tax residents with a pension, rent, investments, or work income from another country.
- Non-residents who receive Portuguese income, such as dividends or rent, and face Portuguese withholding tax.
Not for you if: you are not sure yet whether you are tax resident in Portugal. Read Becoming a Tax Resident in Portugal first.
Updated September 2026. A new Portugal and United Kingdom tax treaty applies in Portugal from 1 January 2026.
Double taxation happens when two countries tax the same income. If you live in Portugal and have income from abroad, it is a real risk, but it is usually avoidable. Portugal has tax treaties with 78 countries that decide which country taxes what. Where both may tax, Portugal gives you a credit for the foreign tax you paid. You claim it on your annual return. The main tool you need is a tax residence certificate, which you can download from the Portal das Finanças in a few minutes.
Why the problem arises
Portugal taxes its tax residents on their income from anywhere in the world. You are usually resident if you spend more than 183 days here in any 12-month period, or have a home here you intend to keep as your usual residence.
Once you are resident, your foreign pension, foreign rent, and foreign dividends are all, in principle, taxable in Portugal. The country where the income arises may tax it too. Two tools stop you paying twice:
- Tax treaties, which share out the right to tax each type of income.
- Portugal's foreign tax credit, which subtracts the tax you paid abroad from your Portuguese tax.
Non-residents are taxed in Portugal only on Portuguese income.
Step 1: check whether a treaty applies
Portugal has 79 double taxation treaties. At the time of writing, 78 are in force and one is signed but not yet in force. The Portal das Finanças lists them all, with a summary table of withholding rates.
Most follow the OECD model. The usual pattern, which you must always check against the actual treaty, is:
| Income | Usually taxed |
|---|---|
| Salary | Where you do the work. Short stays abroad often stay taxable only at home. |
| Private and company pensions | Only in your country of residence, so in Portugal. |
| Government and public service pensions | Only in the country that pays them, unless you are resident in and a national of the other country. |
| Dividends and interest | In your country of residence, but the source country may withhold a capped amount. |
| Rent and gains on property | In the country where the property is. Portugal also counts it but gives relief. |
The government pension rule catches many newcomers. A pension from a former civil service, military, or local authority job is often taxable only in the paying country. A private or company pension from the same country is taxable in Portugal instead.
The new UK treaty
A new treaty between Portugal and the United Kingdom was signed in London on 15 September 2025. It replaces the 1968 treaty. In Portugal it applies to tax due from 1 January 2026. On the UK side, it applies to income tax from the tax year starting 6 April 2026.
Under the new treaty, private pensions paid to a Portuguese resident are taxable only in Portugal. Government service pensions are taxable only in the UK, unless you are a Portuguese national. For more on retirement income, see Retiring in Portugal.
Step 2: get a tax residence certificate
To use a treaty abroad, you usually need to prove you are tax resident in Portugal. For example, you may want a foreign pension fund or bank to stop withholding tax. The proof is a tax residence certificate (certificado de residência fiscal).
How to get it:
- Log in to the Portal das Finanças with your NIF and password.
- Type "certidão" in the search box and choose "Pedir Certidão".
- Choose "Residência Fiscal".
- Fill in the fields. Leave the section about a foreign form blank.
- Confirm. The certificate is issued straight away as a PDF.
Since 1 January 2022, Finanças no longer stamps foreign tax forms. You fill in the foreign form yourself and attach the certificate. Finanças has told all its treaty partners that this certificate is the only valid proof of Portuguese tax residence.
Send the form and certificate before the income is paid if you can. Once tax has been withheld, you have to claim a refund from the foreign tax authority, which is slower.
Step 3: declare your foreign income in Portugal
If you are tax resident in Portugal, you must declare all your foreign income on your annual return, even where a treaty means Portugal collects little or nothing. You use the annex for foreign income (Anexo J). For each item, you enter:
- The country and type of income.
- The gross amount, converted to euros.
- The tax paid abroad.
Keep proof of the foreign tax paid, such as a tax certificate or payslip from the payer. See Declaring Foreign Income in Portugal for the boxes.
How the foreign tax credit works
Finanças works out your Portuguese tax on all your income, then subtracts a credit for the foreign tax. The credit is the lower of:
- the income tax you actually paid abroad, or
- the share of your Portuguese tax that relates to that foreign income.
Two limits apply:
- The treaty rate caps the credit. If a treaty lets the other country withhold 15% but it took 25%, Portugal credits only 15%. Reclaim the extra 10% from the foreign tax authority.
- Unused credit carries forward. If your Portuguese tax is too low to use all the credit in one year, you can use the rest in the next five years.
Where a treaty uses the exemption method instead, the foreign income is not taxed in Portugal. It still counts when setting the rate on your other income.
If you have IFICI or NHR status
Holders of the IFICI regime, which replaced the Non-Habitual Resident (NHR) regime, get the exemption method for most foreign work, business, investment, rental, and capital gains income. Foreign pensions are not on that list. The exempt income still counts when setting your rate. People already in the NHR regime keep their old rules until their ten years end. See Qualifying for the IFICI Tax Regime That Replaced NHR.
If you are not resident and have Portuguese income
Portugal withholds tax on some income it pays to non-residents, such as dividends and interest. If a treaty cuts that rate, you claim the lower rate with the RFI forms:
- Modelo 21-RFI: asks the Portuguese payer to withhold less or nothing. Give it to the payer before the income is paid.
- Modelos 22-RFI, 23-RFI, and 24-RFI: claim a refund of Portuguese tax already withheld, for different types of income.
Each form needs a tax residence certificate from your country of residence, or certification by its tax authority. A 21-RFI with its certificate is valid for up to a year from the date the certificate is issued. It expires at the end of the tax period the certificate covers. Tell the payer at once if your circumstances change.
Non-residents who own property in Portugal may also need a tax representative. See Appointing a Fiscal Representative in Portugal.
Common mistakes
- Not declaring foreign income because of a treaty. Relief comes through the return. Leaving income out can lead to penalties.
- Mixing up pension types. Private pensions and government pensions often follow opposite rules.
- Letting the foreign payer over-withhold. Portugal will not refund tax that another country took above the treaty rate.
- Missing proof of foreign tax. Without it, Finanças may refuse the credit.
- Assuming the treaty covers Social Security. Tax treaties cover income tax. Social Security contributions follow separate agreements. See How Your Years Working Abroad Count toward a Pension in Portugal.
If you are a US citizen
The United States taxes its citizens on their worldwide income wherever they live. The Portugal and US treaty keeps that right for the US. You will usually file in both countries and use each country's credit rules. Get advice from someone who knows both systems. The US Internal Revenue Service explains the US side (see Sources).
Sources
This guide is written from official Portuguese and EU sources and, for prices and contact details, the providers' own websites.
- Portal das Finanças, IRS Code article 16 (residence): https://info.portaldasfinancas.gov.pt/pt/informacao_fiscal/codigos_tributarios/cirs_rep/Pages/irs16.aspx (183-day and habitual residence tests)
- Portal das Finanças, IRS Code article 81 (elimination of international double taxation): https://info.portaldasfinancas.gov.pt/pt/informacao_fiscal/codigos_tributarios/cirs_rep/Pages/irs81.aspx (credit method, treaty cap, five-year carry-forward, exemption method, IFICI)
- Portal das Finanças, double taxation treaties: https://info.portaldasfinancas.gov.pt/pt/informacao_fiscal/convencoes_evitar_dupla_tributacao/convencoes_tabelas_doclib/Pages/index-5623.aspx (79 treaties, 78 in force, summary table)
- Portal das Finanças, OECD Model Tax Convention (Portuguese text): https://info.portaldasfinancas.gov.pt/pt/informacao_fiscal/convencoes_evitar_dupla_tributacao/convencoes_tabelas_doclib/Documents/CDT_Modelo_OCDE.pdf (general allocation of taxing rights)
- Autoridade Tributária, tax residence certification notice (14 December 2021): https://info.portaldasfinancas.gov.pt/pt/informacao_fiscal/convencoes_evitar_dupla_tributacao/Documents/Certificacao_residencia_fiscal.pdf (online certificate steps, end of form stamping from 1 January 2022)
- Portal das Finanças, FAQ on treaty forms: https://info.portaldasfinancas.gov.pt/pt/apoio_contribuinte/questoes_frequentes/Pages/faqs-00564.aspx (purpose and validity of Modelo 21-RFI)
- Portal das Finanças, Modelo 21-RFI (English and Portuguese): https://info.portaldasfinancas.gov.pt/pt/apoio_contribuinte/modelos_formularios/convencoes_dupla_trib_internacional/Documents/RFI_21_uk.pdf (withholding relief form)
- Resolução da Assembleia da República n.º 206-A/2025, of 29 December (Portugal and UK treaty): https://files.diariodarepublica.pt/1s/2025/12/24901/0000300050.pdf (signature date, pension articles, effective dates)
- Lei n.º 82/2023, of 29 December (State Budget 2024): https://diariodarepublica.pt/dr/detalhe/lei/82-2023-835864042 (end of NHR, IFICI exemption method, NHR transitional rule)
- US Internal Revenue Service, US citizens and resident aliens abroad: https://www.irs.gov/individuals/international-taxpayers/us-citizens-and-resident-aliens-abroad (US taxation of citizens living abroad)
Last verified September 2026. Rules and fees change; check the official source before acting.