# Portugal Tax free?



## Redshoes (2 Nov 2019)

I was in Portugal recently and while talking to friends they said that Portugal has a special agreement with EU ( an agreement designed to help Portugal's economy, it is a very poor country) where if you live in the counrtry for 183 days and apply for residency then you can live tax free  for 10 years,.i.e no tax on your pension or investments for 10years.  The programme is designed for retirees but working people are also are taxed at a lower rate  There are some  exclusions for example, civil servants cannot take advantage of this.  Applying for residency in Portugal doe not affect your residency in Ireland in any way. I think its very interesting but the only downside for me is Portugal's weather, it's hot, has blue skies and very little rain.


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## noproblem (3 Nov 2019)

So, what's your question?


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## joe sod (3 Nov 2019)

i presume "in the country" means in the countryside hardly in the cities like lisbon which is already a highly desirable place to live and becoming a big draw for the high tech industry , and booming property prices. Its the countryside in portugal that is depressed, the cities are doing very well.
There was a scheme for non EU nationals to invest 500k or something in portugal a decade ago and get portuguese passport, alot of russians availed of this.


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## Slim (3 Nov 2019)

Redshoes said:


> I was in Portugal recently and while talking to friends they said that Portugal has a special agreement with EU ( an agreement designed to help Portugal's economy, it is a very poor country) where if you live in the counrtry for 183 days and apply for residency then you can live tax free  for 10 years,.i.e no tax on your pension or investments for 10years.  The programme is designed for retirees but working people are also are taxed at a lower rate  There are some  exclusions for example, civil servants cannot take advantage of this.  Applying for residency in Portugal doe not affect your residency in Ireland in any way. I think its very interesting but the only downside for me is Portugal's weather, it's hot, has blue skies and very little rain.


Revenue has curtailed this scheme in the past few years to the point that it is no longer feasible.


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## Itchy (3 Nov 2019)

Slim said:


> Revenue has curtailed this scheme in the past few years to the point that it is no longer feasible.


Do you have any reference for this? 

I dont understand how Revenue could curtail a Portuguese scheme? Presumably when you become non-domiciled, the reach of Revenue is different to those who are domiciled and resident.


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## ashambles (4 Nov 2019)

In response to the Portuguese scheme Revenue announced a general rule than an ARF will be taxed at source in Ireland. Revenue decided pension income from an ARF is not pension income. 









						Looking to retire abroad? Revenue has just made it harder
					

If you’re chasing a tax free retirement in Portugal, a new ruling may make you think twice




					www.irishtimes.com


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## Setanta12 (4 Nov 2019)

Apart from the Revenue ARF thing above, this Portuguese wheeze is well known internationaly and accounts for a lot of superstars living there ... and then  movign on.  Madonna and a certain Irish actor of German extraction is also living there, I believe.

I don't see any problem with a coutnry exercising their own tax soverignity in ths manner.  I do see a problem with a certain entrepreneur moving his tradeshow to Portugal and then lambasting his own country for tax avoidance schemes and worse.


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## Gordon Gekko (4 Nov 2019)

It’s fairly plain vanilla stuff to be honest.

Move to Portugal and for 10 years your pension or dividend income is tax-free.

N/A for ARFs or public sector pensions.

Although the ARF point is still being fought in the Courts. Primary argument being around whether an ARF is a pension or not as defined in tax treaties.


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## nest egg (4 Nov 2019)

Portugal is well publicised, the article makes reference to France & Spain as well as having similar benefits, does anyone know the particulars for either / both of these countries?


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## noproblem (4 Nov 2019)

Surely if I decide to live in a country like Portugal, for a specified no of days a year, that make me a non resident of Ireland, it has no consequence for me in a tax sense from Irish revenue?  Is it true that Cyprus and possibly Portugal only tax pensioners from other countries at 5% if they become resident there?


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## nest egg (4 Nov 2019)

Suggest you read up about "ordinarily resident" for tax purposes, and also about withholding taxes, you might not like what you find out though!


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## Gordon Gekko (4 Nov 2019)

Ordinary residence isn’t a major deal though. The Treaty generally provides an out, and in any event it’s only a three year gig.


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## fistophobia (4 Nov 2019)

I dont see the problem here. Theres plenty of Irish people moved and retired to Portugal.
With-holding tax - move your holdings, DVF... its a simple process.


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## argolis (6 Nov 2019)

I was speaking to a pension adviser who recently helped a client set something up involving Portugal and Malta. If I had to guess, I'd say the pension was transferred before retirement to Malta, as you can drawdown a 30% lump-sum tax-free there. I'd imagine it also side-steps the problem of Irish tax being applied at source because the pension is now housed in Malta and they don't have this taxation fudge like Revenue are trying by calling an ARF "capital".

It's amusing that Revenue are trying to clamp down on Portgual as a tax-haven while simultaneously being reputedly the largest tax-haven in the world for US multinationals.


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## B.A.C. (6 Nov 2019)

If an Irish resident and domiciled person sold their Irish LTD they will have to pay CGT on this sale.

If they live in Portugal for a period of time they wont pay this CGT liability?

What about remittance of the funds back to Ireland upon relocation back to Ireland - would a tax liability arise?


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## Gordon Gekko (6 Nov 2019)

An Irish person wouldn’t typically sell a company though; their holding company would, where no CGT arises.

Historically, that person would then leave Ireland and take the proceeds out of the holding company by way of a tax-free dividend.


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## Redshoes (19 Nov 2019)

Slim said:


> Revenue has curtailed this scheme in the past few years to the point that it is no longer feasible.


That is absolutely not true!! However Will put a deadline on applications for the tax free programme in 2020, however if you apply before the deadline you can take advantage of the 10 years tax free status.  Consult a Portugues tax accountant or solicitor and they will confirm.


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## Redshoes (19 Nov 2019)

joe sod said:


> i presume "in the country" means in the countryside hardly in the cities like lisbon which is already a highly desirable place to live and becoming a big draw for the high tech industry , and booming property prices. Its the countryside in portugal that is depressed, the cities are doing very well.
> There was a scheme for non EU nationals to invest 500k or something in portugal a decade ago and get portuguese passport, alot of russians availed of this.


One of the reasons why Lisbon is popular with young foreign workers is that they can work for whatever global company they are employed with live in Lisbon and pay 15% tax for 10 years.  Under the tax free programme you can live anywhere in Portugal.


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## Redshoes (19 Nov 2019)

mojoask said:


> Portugal is well publicised, the article makes reference to France & Spain as well as having similar benefits, does anyone know the particulars for either / both of these countries?


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## Redshoes (19 Nov 2019)

I have been told that France has a very high rate of income tax on earning and pension in France. In the Algarve, especial Eastern Algarve, the French are retiring there in droves and buying property, so are the Swedish, in order to take advantage of the 10 year tax free status.  The Swedish Statsminister is unhappy and wanting to change the tax laws in Sweden so pension is taxed at source and not taxed at the zero rate in Portugal, but nothing has changed yet.


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## Gordon Gekko (19 Nov 2019)

It tends not to be that simple. If you’re in the EU, there has to be free movement of people and capital.

And pensions are dealt with in tax treaties which have been agreed between countries and which override domestic legislation.


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## Slim (19 Nov 2019)

It seems to be answered in this page from Revenue...https://www.revenue.ie/en/life-events-and-personal-circumstances/moving-to-or-from-ireland/leaving-ireland/if-you-have-retired-and-are-moving-abroad.aspx

Basically:
*Private sector Irish occupational pension*
You may be receiving an Irish occupational pension from a private sector employer. If so, your pension will be taxed in the country that you are tax resident in if you are both:

non-resident in Ireland for tax purposes
resident in a country which has a Double Taxation Agreement with Ireland.
You can request a [broken link removed] which would result in no Irish tax being deducted.
You may be resident in a country with which Ireland does not have a Double Taxation Agreement. If so, your pension will continue to be taxed in Ireland.
*Irish public sector pension*
You may be receiving an Irish pension from the Government or a local authority. In general, this pension is taxed in Ireland regardless of your residence status. Refer to the Government Services article of the Double Taxation Agreement between Ireland and the country you intend to be resident in.
*Approved Retirement Fund (ARF) and vested Personal Retirement Savings Accounts (PRSA)*
ARFs and vested PRSAs are post-retirement investment funds. If you withdraw money from either, you will be charged tax at source regardless of your residence status. PAYE exclusion orders are not issued in respect of these funds.
*Irish State Pensions and foreign State Pensions*
Irish State Pensions and foreign State Pensions are taxed by the country that you are resident in.


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## mtk (20 Nov 2019)

Slim said:


> *Approved Retirement Fund (ARF) and vested Personal Retirement Savings Accounts (PRSA)*
> ARFs and vested PRSAs are post-retirement investment funds. If you withdraw money from either, you will be charged tax at source regardless of your residence status. PAYE exclusion orders are not issued in respect of these funds.
> *I*



Wondering Slim how is it taxed if non resident ?
all as paye  like if resident
or gains taxed as income
or something else?


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## SlurrySlump (20 Nov 2019)

How long does a person have to stay out of Ireland and move to Portugal to be a non resident?

Can you own a property in both countries but maybe spend 7 months of the year in Portugal.


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## Slim (20 Nov 2019)

mtk said:


> Wondering Slim how is it taxed if non resident ?
> all as paye  like if resident
> or gains taxed as income
> or something else?


Sorry, I don't know that.


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## Conan (20 Nov 2019)

Drawdowns from ARFs and PRSAs are taxed at source irrespective of tax residence. So cannot benefit from Portuguese tax treatment. Only pensions coming from Occupational Pension (excluding Public Service Pensions) can benefit from the 20 year tax deal in Portugal.


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