Expat tax in Portugal: What you need to know as a UK expat

Planning to move to Portugal from the UK? It’s a popular choice for British expats, drawn there by the warm weather, fabulous food and friendly people. As you plan your move abroad, one important if rather complicated thing you’ll need to get to grips with is tax.

In this guide, we’ll give you the lowdown on expat taxes in Portugal - so you know what to expect. This includes info on income tax for British expats, current tax rates and everything else you need to know.

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Taxes in Portugal - key facts

Before we dive into the details, here are a few of the main points you need to know about taxes in Portugal:¹

• Tax year - 1st January to 31st December
• Tax authority - Autoridade Tributária e Aduaneira(Portuguese Customs and Tax Authority)
• Tax return due date - 30th June.

Anyone earning taxable income in Portugal must have a Numero de Identicacao Fiscal (NIF) and file a personal income tax return each year.

How are expats taxed in Portugal?

Foreign nationals living in Portugal are taxed according to their tax residency status.

If you live there permanently and typically spend more than 183 days in the country in a year - or if your main home is there - you’re considered a tax resident. This means you have to pay income tax on both income earned in Portugal and worldwide income.¹

If you spend less than 183 days in the country (for example, if you split your time between Portugal and the UK, or another country) per year, you’re considered a non-resident.

This means you’ll only have to pay income tax on anything you earn in Portugal. Other income will be taxed in the country you’re considered to be domiciled or a permanent resident in - for example, the UK.

Here’s how it works at a glance:¹

What was the Non-Habitual Resident (NHR) scheme in Portugal?

Until recently, there was a government-backed tax scheme in place in Portugal which offered attractive tax benefits to foreign non-residents. It was known as the Non-Habitual Resident (NHR), and offered a tax exemption on foreign-sourced income for 10 years along with a flat 20% rate of tax for Portugal-sourced income.²

The NHR scheme ended in 2025, so new applicants can no longer apply for it. However, it’s been replaced with the Incentivised Tax Status Program (ITS).

What is the Incentivised Tax Status Program (ITS) in Portugal?

The new ITS scheme in Portugal offers a flat 20% tax rate on certain professional incomes, including self-employment. It also offers a 50% exemption for up to 5 years, and exemptions on most foreign-sourced income (apart from pensions).³

To qualify, you’ll need to meet the following criteria:³

• Become a Portuguese tax resident
• Not have been a tax resident of Portugal for the previous five years
• Work in a specific profession - such as teaching, science, IT, manufacturing and agriculture.

Who pays personal income tax in Portugal?

You’ll need to pay income tax in Portugal if you’re a tax resident, or you’re a non-resident who earns income sourced in Portugal.

For example, if you work for a Portuguese employer or business, or have assets such as a rental property located in Portugal that brings in income.

What kinds of income are taxable in Portugal?

Expats who are considered tax residents in Portugal - which will be the case for anyone who lives there permanently - will need to pay income tax on the following:

• Portuguese-sourced income from employment or self-employment
• Global income from employment or self-employment - if remitted to Portugal
• UK state pension and private pension payments - if remitted to Portugal
• UK or overseas rental income - if remitted to Portugal.

Income tax rates in Portugal

Portugal tax rates for residents for 2025 are as follows:¹

For non-residents, the tax rate is a flat 25% on Portuguese-sourced income only,¹ unless you happen to qualify for the new ITS scheme.

Does the UK have a double tax treaty with Portugal?

Yes, the UK and Portugal have what is known as a double taxation agreement (DTA). This is designed to prevent the same income from being taxed twice, once in the UK and once in Portugal.

The DTA covers income tax and capital gains tax among other taxes, although the situation can be more complicated for pensions.

It’s best to get specialist tax or financial advice to help you understand which country you need to pay tax in as an expat, and how to claim double tax relief if eligible.

Why it’s crucial to get professional advice on expat tax in Portugal

Tax can be extremely complicated, especially when you’ve moved to a new country and the tax system is different to what you’re used to.

It can be even more complex if you live and earn income in more than one country. There’s also the language barrier to consider, as many forms, online platforms and guidance documents may be in Portuguese.

This is why it’s really important to get professional tax advice before moving to Portugal. A specialist can help you understand your tax obligations and structure your affairs properly, so you’re not paying too much tax or falling foul of the rules in either country.

They can also help with the often-confusing issue of double tax treaties, where you may need to claim tax relief to avoid paying tax twice in two jurisdictions.

Manage your money between the UK and Portugal with Wise

When you’re moving abroad but still have connections in your home country, you’ll need a way to manage your money in multiple currencies.

Wise offers a cost-effective solution, with a multi-currency account that lets you hold and convert between 40+ currencies all in one place - including British pounds (GBP) and euros (EUR). It’s not a bank account but offers some similar features, and your money is safeguarded.

Plus, you can get a Wise card to spend in Portugal and 160+ countries worldwide. This contactless card automatically converts currency at the mid-market exchange rates whenever you spend, only adding a tiny currency conversion fee*.

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Sources used:

Sources last checked 08-Dec-2025