Spain vs. Portugal taxes: US expat guide

This publication is provided for general information purposes and does not constitute legal, tax or other professional advice from Wise US Inc. or its affiliates, and it is not intended as a substitute for obtaining business advice from a Certified Public Accountant (CPA) or tax lawyer.

Portugal and Spain are attractive destinations for US expats. You can enjoy a vibrant new way of life, with favorable tax rates for some foreign workers.

So, is Spain or Portugal better for expats? How much will you pay for expat taxes in Spain vs. Portugal? We take a look at everything you need to know.

We'll also introduce the Wise account, which allows you to send, spend, and receive your money across the globe in over 40 currencies – all at the fair mid-market rate.

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Table of contents
Portugal vs. Spain: Expat tax rates Spain’s Beckham Law Portugal’s IFICI Program (NHR 2.0) Portugal vs. Spain: Expat income tax Portugal vs. Spain: Residency visas Everywhere money. Meet Wise: the world's most international account Other considerations

Portugal vs. Spain: Expat tax rates

If you’re a US expat living in Portugal or Spain, you’ll need to understand your tax implications. All countries use different rates, which can be a little confusing.

Here’s everything you need to know about expat taxes in Spain vs. Portugal, including how much you’ll pay for local income tax, foreign income, and pensions.

	🇪🇸 Spain: Beckham Law (special expat regime)	🇵🇹 Portugal: Tax Incentive for Scientific Research and Innovation (IFICI)
Status	Expats will be taxed as non-residents for 6 years¹	Expats can access IFICI tax rates for 10 years²
Eligibility	You can qualify if you haven’t been a Spanish tax resident in the last 5 years You’ll also need a Spanish employment contract¹	You can qualify if you haven’t been a Portuguese resident in the last 5 years You’ll also need to earn income from an eligible job²
Local income tax	24% flat tax rate on Spanish employment income up to 600,000 EUR¹	20% flat rate for income earned from your qualifying job in Portugal — up to 53% for any other type of income, such as rental, pension, or investment income²
Foreign income	You are exempt from paying tax on most foreign income³	You are exempt from paying tax on most foreign income²
Pensions	You won’t pay tax on pensions earned in the US³	Pension income is taxed at marginal rates of up to 53%²
Wealth tax	Wealth tax only applies to Spanish assets³	Portugal doesn’t charge wealth tax²

Spain’s Beckham Law

The Beckham Law offers favorable tax rates for expats in Spain. You can access a 24% flat tax rate on income up to 600,000 EUR. This compares to Spain’s regular tax rate for residents, which can reach 47%.

You can also access a tax exemption on most foreign income. This is a huge draw for expats who still receive pension, rental, or employment income from the US.¹

You won’t have to declare your foreign assets to the Spanish tax authorities under the Beckham Law. You’ll also only pay wealth tax on local assets.³

Spain’s Beckham Law comes with a few key eligibility criteria, including:

• an employment contract with a Spanish company
• proof that employment is the main reason for your relocation
• proof that you haven’t been a resident of Spain in the last 5 years⁴

The Beckham Law is valid for up to 6 years. After that, you’ll typically pay Spain’s regular tax rates like a resident.

Portugal’s IFICI Program (NHR 2.0)

In January 2024, Portugal’s Non-Habitual Resident (NHR) program was replaced by the IFICI program. This offers advantageous taxes for expats living in Portugal.

You’ll pay a flat rate of 20% on any income derived from your qualifying job. For other local income, such as rental income from Portuguese properties, you’ll pay up to 53%. You’ll also pay up to 53% on pension income from abroad.

This is a very beneficial regime for expats. You can access a lower tax rate on the majority of your income — and you won’t pay tax on most foreign assets.

However, you’ll need to earn money from a role deemed essential to Portugal’s economic growth. You can work for certain types of startups, technology centers, higher education organizations, and other eligible companies.

If you’ve been a resident of Portugal during the last 5 years, you won’t qualify for the program. You also can’t access the IFICI if you’ve previously received benefits from the NHR program.²

Portugal vs. Spain: Expat income tax

Although the Beckham Law and IFICI program offer favorable tax rates for many expats in Spain or Portugal, not everyone is eligible.

Let’s take a closer look at regular tax rates in Spain vs. Portugal, including how much you’ll pay for foreign pensions, savings, and employment income.

Income type	🇪🇸 Spain	🇵🇹 Portugal
Employment	Typically ranges from 19% to 47%, depending on how much you earn This includes local and worldwide income⁵	Typically ranges from 13% to 48%, depending on how much you earn⁶
Savings	Ranges from roughly 19% to 30%⁵	This may depend on the type of investment income you earn For example, Portuguese and foreign interest income is taxed at 28%⁷
Foreign pensions	US government pensions are considered taxable income and are subject to Spain’s personal income tax rates⁸ Social security payments should only be taxed in the US, according to the Spain-US tax treaty⁹	Foreign private pensions are taxed as regular general income in Portugal¹⁰ Public US government pensions and social security payments should only be taxed in either the US or Portugal, according to the Portugal-US tax treaty¹¹

Portugal vs. Spain: Residency visas

Both Spain and Portugal offer a range of visas for expats. Each of these visas may come with different tax implications for your move abroad. Let’s take a closer look.

Spain’s Non-Lucrative Visa

Spain's Non-Lucrative Visa (NLV) is aimed at non-EU expats who can afford to live in Spain without working.

Under the visa, your spouse and children can join you in Spain. You can also travel in the EU’s Schengen area without applying for additional visas or permits.

If you have an NLV, you’ll qualify as a Spanish tax resident. This means you’ll pay income tax on your worldwide income.¹²

Spain’s Digital Nomad Visa

You can also apply for Spain’s Digital Nomad Visa if you want to live in Spain and work remotely for a company or freelance clients outside the country.

You’ll need a university degree and at least 3 years of work experience in your field to qualify. You’ll also need to earn at least 2,763 EUR per month.¹³

If you have a Digital Nomad Visa, you’ll pay tax like a resident.¹⁴ This includes a marginal income tax rate of up to 47%. However, if you qualify for the Beckham Law program, you may be able to reduce your tax bill.

Portugal’s D7 Visa

The D7 Visa is aimed at expats who earn passive income. This includes retirees who receive money from pensions, rental income, or dividends, for example.

Portugal’s D7 Visa requirements include the ability to earn an amount equal to the Portuguese minimum wage every month. This changes annually, but it’s currently around 920 EUR.

You won’t need to make an initial investment in the local economy, but you’ll likely pay tax like a resident.¹⁵ This could be as much as 48% on some income.

Portugal’s D8 Visa

Portugal’s D8 Visa is a good choice for remote workers and freelancers who want to live in Portugal while working for a company outside the country.

You can access visa-free travel in the Schengen Zone without applying for additional permits. However, you’ll pay tax like a resident.¹⁶

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Other considerations

Let’s take a look at a few other things to consider as an expat in Spain or Portugal, including wealth tax, VAT, and the cost of living in Spain vs. Portugal.

Wealth & inheritance tax

Portugal doesn’t charge an annual wealth tax on foreign or local assets. However, you may need to pay a luxury property tax on some Portuguese real estate.¹⁷

You also won’t pay a traditional inheritance tax in Portugal. Instead, you may pay a specific type of stamp duty when inheriting certain assets.¹⁸

This compares to Spain, where residents and non-residents will pay both inheritance tax and wealth tax to the local government.

Depending on the value of your inheritance, you may pay as much as 34% in tax. The country charges the same rate for residents and non-residents.¹⁹

In Spain, residents will pay wealth tax on foreign and local assets. However, non-residents will only pay on local assets.²⁰

VAT & cost of living

Portugal and Spain are popular with US expats looking to retire or work abroad. Portugal is known for its good wealth tax policies. You can buy affordable property — and seniors can access free public healthcare.²¹

In Spain, you can rent or buy property on a budget in popular retirement locations like Barcelona and Valencia.²²

However, you’ll need to consider Value-Added Tax (VAT) in both countries. This tax is added to any goods or services bought from VAT-registered businesses.

Portugal’s standard VAT rate is 23%²³, whereas Spanish businesses charge a standard rate of 21%.²⁴

Social security

If you receive social security benefits while living overseas, you’ll need to look into any US taxes for citizens living abroad as well as taxes in your new country.

Portugal and the US have a tax treaty in place, so you won’t face double taxation. You’ll only pay tax on social security in your country of residence.

If you’re a Portuguese resident, this means you’ll pay Portuguese personal income tax on your US social security benefits.¹¹

Spain and the US also have a tax treaty in place. This gives the US sole rights to tax your social security benefits. These payments should be exempt from taxation in Spain.²⁵

Seek advice from a tax advisor to understand exactly how much tax you’ll pay to receive your social security benefits abroad.

Retirement

If you want to retire in Portugal or Spain, you’ll need to think about how expat taxes will affect your private and public pensions.

In both countries, some foreign pensions will count toward your worldwide taxable income. This means you’ll end up paying regular income tax on your benefits.

Spain and Portugal’s expat tax rates only apply to those who work abroad, so you may not qualify for the Beckham Law or the IFICI regime.

That said, Portugal offers no wealth tax, which is a big draw for high-net-worth individuals. You can also access an affordable cost of living in both Spain and Portugal.

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Portugal and Spain offer favorable tax regimes for US expats who want to relocate abroad. You can avoid hefty taxes on your foreign income and continue to receive your social security benefits overseas.

Ultimately, the best country for your big move will depend on your individual situation. Portugal may be best for wealthy retirees, for example, as the country doesn’t charge wealth tax.

However, if you want to get a job abroad, Spain’s Beckham Law offers low tax rates for expats, including an exemption on most foreign income.

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Sources

1. Hightekers - Your gateway to the Beckham Law
2. IBA Net - An overview of Portugal’s new IFICI regime
3. Black Tower FM - The Beckham Law
4. Balcells Group - Beckham Law
5. Nimextranjeria - Income tax in Spain for foreigners
6. Global Citizen Solutions - Taxes in Portugal for foreigners
7. Dmatax - Taxation of investment income in Portugal
8. Nimextranjeria - How are US pensions taxed in Spain?
9. Lextax - The definitive guide: how US social security is taxed for expats in Spain
10. MCS - Retirement tax in Portugal
11. USCIS Guide - Social security benefits while overseas for US citizens in Portugal
12. Lexidy - Non-Lucrative Visa in Spain
13. Global Citizen Solutions - Non-Lucrative Visa Spain
14. Traveloholic - Spain Digital Nomad Visa tax exact rates and guide
15. Portugalist - Portugal D7 Visa
16. Global Citizen Solutions - Portugal Digital Nomad Visa
17. PCC Wealth - Wealth tax in Portugal
18. PCC Wealth - Inheritance tax Portugal
19. My Spanish Residency - Inheritance tax in Spain for expats
20. Chorus Financial - Wealth tax in Spain
21. Nomad Capitalist - Cost of living in Portugal
22. International Living - Cost of living in Spain
23. VAT Calc - Portugal VAT guide 2025 update
24. Hightekers - A complete guide to VAT in Spain for expats

Sources checked 12/16/2025