# Portugal - tax free pension payments



## letitroll (7 Apr 2015)

Hi i've seen this mentioned around the place

In terms of Irish pensions is the tax free / non-resident deal applicable.

I myself will be on a Civil Service pension of c.45,000euro (PRSI stamp A) could I move to Portugal and have my pension paid exempt of tax???

Thanks.


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## Slim (8 Apr 2015)

letitroll said:


> Hi i've seen this mentioned around the place
> 
> In terms of Irish pensions is the tax free / non-resident deal applicable.
> 
> ...


Unfortunately, AFAIK the arrangement does not apply to state/public sector pensions, only private pension funds. Slim


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## mtk (11 Apr 2015)

Yes saw this  mentioned in various Portuguese  Estate agent windows .Afaik drawdowns of arfs are also not covered by this either.


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## Gordon Gekko (11 Apr 2015)

mtk said:


> Yes saw this  mentioned in various Portuguese  Estate agent windows .Afaik drawdowns of arfs are also not covered by this either.



Not yet...


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## letitroll (13 Apr 2015)

I have a PRSA fund also.......deciding whether to turn into an ARF or annuity........does anyone know is annuity income exempt in that case?


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## noproblem (14 Apr 2015)

I know some friends who have retired to Cyprus and they tell me their pensions are paid to them in Cyprus where they pay tax of 5%. Both are ex Teachers, so they are public service pensions.


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## Agent 47 (14 Apr 2015)

As a public servant myself (reluctantly) I will be on that boat out of here as well. Country is too high cost.
Looking at Portugal so clear a pathway Enda!

Seriously, there are some Financial Advisors on this forum who must have come across this situation and an offer an answer to the OP question.


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## Slim (15 Apr 2015)

From a Deloitte leaflet on the Portuguese Tax situation:
"..Additionally, the pensions should be either subject to tax in the source country in accordance with the provisions of a tax treaty or deemed not to be derived in Portugal in accordance with the Portuguese sourcing rules, i.e., not paid by a Portuguese tax resident entity nor attributable to a Portuguese permanent establishment of a nonresident. If these requirements are met, the pension will not be taxed in Portugal and, depending on the provisions of the applicable tax treaty, it is usually also non-taxable in the source country for the duration of residence in Portugal. *(Note that taxing rights in relation to pensions of retired civil servants and other government employees generally are allocated by tax treaties to the paying country, regardless of the residence status of the recipient)*." emphasis added by me.


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## Slim (15 Apr 2015)

noproblem said:


> I know some friends who have retired to Cyprus and they tell me their pensions are paid to them in Cyprus where they pay tax of 5%. Both are ex Teachers, so they are public service pensions.


From the Telegraph - [broken link removed]

Are your friends' pensions from the UK?


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## elacsaplau (15 Apr 2015)

Agent 47 said:


> Seriously, there are some Financial Advisors on this forum who must have come across this situation and an offer an answer to the OP question.



Couldn't agree more - I find the absence of informed commentary on this topic very disappointing. Many well-off pensioners spend 3 or 4 months abroad anyway each year.....so if they were to spend an additional two months (to bring them past the magic 183 days), they could satisfy the Portuguese residency requirements with potentially consequent significant reductions in income and other taxes.

I am not suggesting that taking up residence in Portugal is necessarily the right decision for everyone. But it is potentially an option worth seriously exploring and in order to be able to consider appropriately, one needs relevant specific information. My general sense is that financial advisors generally are not sufficiently au fait with the specific rules to provide relevant advice and this is regrettable.


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## noproblem (15 Apr 2015)

Slim said:


> From the Telegraph - [broken link removed]
> 
> Are your friends' pensions from the UK?


No Slim, they were National School teachers for 40+ years in the West of Ireland.
Just as a matter of interest, the article you've highlighted was written in March 2013 and any controls imposed by Cypriot banks have now been lifted.


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