IRS Portugal for Expats: How It Works, What You Pay, How to File

Are there Double Taxation Agreements (DTAs) for expats?

To prevent the double taxation of income, Portugal has established Double Taxation Agreements (DTAs) with numerous countries worldwide. These agreements ensure that income earned in one country is not taxed twice by both countries, providing relief for individuals who have income sources in both Portugal and another country.

How DTAs work?

When an individual is a resident of both Portugal and another country that has a DTA with Portugal, the treaty determines which country has the primary right to tax the income. DTAs typically include tie-breaker rules to determine residency in cases where an individual meets the residency criteria in both countries. These rules often consider factors such as the location of the individual's permanent home, their center of vital interests, and their habitual abode.

A foreign national from a country that has signed a tax treaty with Portugal may benefit from lower withholding tax on their foreign-source income. You can consult the official Tax Authority (Autoridade Tributária e Aduaneira - AT) website for a comprehensive list of countries with which Portugal has a DTA. Understanding these agreements is particularly important for expats, cross-border workers, pensioners, and anyone with income sources outside of Portugal.

Accessing the official list of countries with Double Taxation Agreements (DTAs) with Portugal

The most reliable and current information regarding countries with DTAs with Portugal can be found on the official website of the Portuguese Tax Authority (Autoridade Tributária e Aduaneira - AT).

Steps to Access the Information:

1. Visit the AT Website: Go to the official website of the Autoridade Tributária e Aduaneira (AT).
2. Search for "Convenções para Evitar a Dupla Tributação": Use the search function on the AT website and enter keywords like "Convenções para Evitar a Dupla Tributação" (Double Taxation Agreements) or "CDT."
3. Navigate to the Relevant Section: Look for a section or page dedicated to international tax agreements or double taxation treaties.
4. View or Download the List: The list of countries is typically available as a downloadable document (PDF) or presented as a webpage.

What is the tax treaty between US and Portugal?

The tax treaty between the United States and Portugal is the bilateral Income Tax Convention (with a related Protocol) designed to prevent double taxation and reduce certain cross-border withholding taxes under rules of international taxation.

What the US-Portugal tax treaty does in practice?

• Defines who is a “resident” of each country for treaty purposes (important when both countries could claim you as resident).
• Sets rules for where different types of income are taxed, such as employment income, business profits (often tied to “permanent establishment”), dividends, interest, royalties, pensions, and certain capital gains.
• Provides a framework to avoid double taxation, typically by allowing relief through credits (e.g., recognition of foreign tax paid to the other country, depending on the income type and your residency).
• Includes anti-abuse provisions (e.g., “Limitation on Benefits”) and an exchange of information article for tax compliance.

What is the tax treaty between UK and Portugal?

The tax treaty between the UK and Portugal is the UK-Portugal Double Taxation Convention (a bilateral treaty to eliminate double taxation on taxes on income and capital gains, and to prevent tax evasion/avoidance).

What applies today (as of January 2026)

• New treaty (2025 Convention): The UK and Portugal signed a new convention in London on 15 September 2025. HMRC’s published treaty text shows it is now in force (page updated 8 January 2026).
• It enters into force when both countries complete internal procedures and notify each other, and then it takes effect from the next relevant tax dates (e.g., from 1 January for many withholding-tax events; from the next 6 April UK tax year for UK income tax/capital gains tax).
• It also states that the 1968 treaty ceases to have effect for a tax once the 2025 treaty has effect for that tax, while the old treaty can still apply to income arising before the switchover.

How people usually claim treaty relief (typical paperwork)

• UK side: HMRC explains how to request a Certificate of Residence so you can claim relief abroad and avoid double taxation.
• Portugal side: The Portuguese Tax Authority (AT) provides pages and procedures for double tax treaties, including forms and fiscal-residence certification to activate treaty relief.

What are the key dates for IRS in Portugal for expats?

• Tax Year: January 1st to December 31st.
• IRS Filing Period: April 1st to June 30th of the following year (e.g., for income earned in 2025, the filing period is April 1st to June 30th, 2026).
• Tax Payment Deadline: August 31st.

Where to file your IRS return as an expat in Portugal?

All IRS returns must be filed through the official Portuguese Tax Authority portal, the Portal das Finanças.

What are the income categories for IRS Portugal?

Portuguese tax law categorizes income into distinct groups, each with its own specific rules and potential deductions. Understanding these categories is essential for accurately reporting your income and calculating your tax liability. The main categories are:

• Category A - Income from Employment (Trabalho Dependente): This type of income includes salaries, wages, commissions, bonuses, and any other remuneration received as an employee.
• Category B - Business and Professional Income (Trabalho Independente): This category covers income earned from self-employment, freelancing, and business activities. It's further divided into:
• Simplified Regime (Regime Simplificado): For taxpayers with lower annual income who meet certain requirements.
• Organized Accounting (Contabilidade Organizada): For taxpayers with higher income or who choose to maintain formal accounting records.
• Category E - Investment Income (Rendimentos de Capitais): This subsection includes income from investments such as interest, dividends, and profits from financial instruments.
• Category F - Property Income (Rendimentos Prediais): This category covers rental income from properties located in Portugal.
• Category G - Capital Gains (Incrementos Patrimoniais): This subsection includes profits from the sale of assets, such as real estate or shares.
• Category H - Pensions (Pensões): This category covers income from pensions, retirement funds, and other similar sources.