With the State Budget 2018, changes may be introduced to the current Non Habitual Residency (NHR) status.

With this tax regime, created in 2009, pensions from foreigners, who change their residence to Portugal, become exempt from tax during a period of 10 years.

Due to recent criticism from Finland and Sweden, evidencing their indignation towards the Portuguese NHR tax regime, Portugal is now thinking about introducing a reduced IRS tax rate of 5% to 10% in 2018 with the aim to guarantee a good relationship with other European countries.

Finance experts believe that those who are already benefitting from the NHR tax regime (10,684 foreign retirees by the end of 2016) will almost certainly remain unaffected, which means that possible alterations will not have a retroactive effect.

For further information on this subject, read the article on the Portugal Resident website.