Portugal expat taxes: Guide for US citizens

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 is a popular location for US expats, with beautiful beaches, vibrant metropolitan centers, and affordable housing for Americans moving abroad.

But how much tax do foreigners pay in Portugal? Let’s take a look at everything you need to know, including tax rates, deductions, and how to pay Portugal’s expat taxes.

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
How much tax do US expats pay in Portugal? Income tax for expats living in Portugal Deductions & allowances for US expats Other taxes in Portugal How to file taxes in Portugal as a US expat: step by step Do I have to pay US taxes if I live in Portugal? Need to pay your US taxes as an expat? Expecting a refund from the IRS, but you live abroad? Meet Wise

How much tax do US expats pay in Portugal?

Expats in Portugal will likely need to pay tax to the national and local government, including income tax, Value-Added Tax (VAT), capital gains tax, and property tax.

You’ll need to declare a few different types of income in Portugal, including money earned from employment, self-employment, pensions, rental properties, and dividends or interest.¹

Let’s take a closer look at Portugal’s taxes for expats, including tax laws, rates, and any exemptions or deductions.

Income tax for expats living in Portugal

Most people living in Portugal will need to pay income tax. This tax is levied on any income you earn, both in Portugal and worldwide. It’s typically used to fund essential services in the country, like healthcare or education.

Personal income tax isn’t charged as a flat rate, as is the case in some countries. Instead, you’ll pay from 14.5% to 48% in income tax.

The exact rate you’ll pay will depend on your income level.² In most cases, the more you earn, the more you’ll pay.

Your income tax rate will also depend on the type of income you need to declare. For example, residential rental income is typically taxed at 25%, whereas dividends are taxed at 28%.³

If you’re a tax resident in Portugal, you’ll pay tax on all of your income, including foreign income and money earned in Portugal.

However, non-residents will only pay tax on Portuguese income.³ This can make a significant difference for US expats living in Portugal.

Deductions & allowances for US expats

There are a few key tax breaks for US expats living in Portugal, including the Non-Habitual Resident Status (NHR) scheme for US citizens.

This offers a tax exemption on some foreign-source income, including dividends, capital gains, and rental income.

You can also access a 20% flat-rate tax on your employment or self-employment income in Portugal. This will significantly reduce your tax bill if you fall into a high tax bracket.

However, the scheme is relatively restrictive. You can only benefit from NHR if you both live and work in Portugal. You’ll also need to work in a certain field to qualify.³

Portugal’s expat tax benefits include a favorable tax treaty and totalization agreement between Portugal and the US. This agreement should help you avoid double taxation.³

However, make sure to do your research before submitting your tax return in the US and Portugal. You should also consult a tax specialist for advice and support.

Other taxes in Portugal

As well as personal income tax, there are some other taxes for US expats living in Portugal. These include:

• dividend tax
• capital gains tax
• property tax
• VAT
• gift or inheritance tax

You’ll pay property taxes to buy or own property in Portugal. Portuguese property taxes usually include a range of charges, including Imposto Municipal Sobre Imóveis (IMI). This is an annual tax for property owners in Portugal.

You’ll also pay Imposto Municipal sobre as Transmissões Onerosas de Imóveis (IMT) to buy and transfer a new property into your name. The exact rate for these taxes will depend on the value of your home.³

VAT is an additional tax charged on most goods and services in Portugal. The standard rate is 23% in mainland Portugal, but some goods may be charged at an intermediate or reduced rate of VAT.⁴

Let’s take a look at Portugal’s tax rates for expats — a foreigner’s guide to paying tax in Portugal.

Tax	Rate
VAT	Standard VAT is 23% in mainland Portugal You may pay a reduced rate of 22% in Madeira and 16% in the Azores, as these are autonomous regions⁴
Property tax	From 0.3% to 0.45% — varies depending on your municipality
Divided tax	28%
Capital gains tax	28%
Social security	11% for employees or 23.75% for employers²

These rates will differ depending on your circumstances and which year you file your taxes. Consult the Autoridade Tributária e Aduaneira (Portuguese tax authority) for up-to-date information on your tax liabilities in Portugal.

How to file taxes in Portugal as a US expat: step by step

If this is your first time filing a tax return in Portugal, you’ll need to ensure you file all the correct documentation to comply with Portugal’s tax laws.

Here’s your step-by-step guide to paying expat taxes in Portugal as a US citizen — everything you need to know.

Determine your residency and requirements

First, you’ll need to determine your tax status in Portugal. Tax works differently for residents and non-residents.

You’ll count as a tax resident if you spend over 183 days in the country within 12 months, or if your primary residence is in Portugal.³

Even if you’re a non-resident, you’ll still need to submit a return, but you’ll only pay tax on income earned in Portugal.

As a non-resident outside the EU, you may also be required to work with a tax representative in Portugal. Make sure to understand your requirements under Portuguese law before submitting your first return.¹

Register via Portugal’s tax portal

Next, you’ll need to apply for a Número de Identificação Fiscal (NIF). This is a tax identification number that lets you submit and pay your taxes in Portugal.

You can get your number at your local Autoridade Tributária e Aduaneira office. You may need to make an appointment to get started.

Once you have your identification number, you can use it to submit your taxes via the Portal das Finanças online.³

Collect your documents

Make sure you have all your documents ready before submitting a tax return in Portugal. You may need a few key pieces of documentation, such as:

• payslips
• tax identification number
• rental income receipts or records
• certificate of bank interest
• pension records¹

There’s a range of different tax documents and annexes to file in Portugal. Each income source will require a different form.

The most common Portuguese expat tax forms are Annex A, Annex J, and Annex F. Do your research before submitting your return to ensure you complete all the appropriate forms.¹

Submit your tax return

Finally, it’s time to submit your tax return and pay any necessary charges. You can file your tax return online via the Portal das Finanças.

You’ll need to complete your return by the appropriate deadlines.

Here are some basic dates to keep in mind:
Portugal’s tax year ends on December 31 File your tax return between April 1 to June 30 of the following year Pay your tax by August 31¹

In some cases, the Autoridade Tributária e Aduaneira may ask for further information about your income or issue a tax refund.

Speak to the Portuguese tax authority for more information about submitting and paying your tax in Portugal.

Do I have to pay US taxes if I live in Portugal?

Even if you live in Portugal, you’ll need to file a tax return in the US. All US citizens who meet the minimum tax reporting threshold must file for US taxes.

However, expats may be able to access a deadline extension. Instead of filing your taxes by April 15, you’ll have up to June 15to complete your tax return.³

Expats can also access a US Foreign Tax Credit (FTC) tax break. This lets you subtract any taxes you’ve already paid to the Portuguese government from your tax bill in the US.

This should mean you’ll pay less tax in the US, especially as taxes in Portugal are often higher than those in the US. In some cases, you may even get credit to use toward future tax bills.³

Need to pay your US taxes as an expat? Expecting a refund from the IRS, but you live abroad? Meet Wise

Paying for your US taxes or receiving a tax refund can be tricky — the payment options are often slow and costly, and this doesn’t get better when you’re not in the country and/or you manage different currencies.

Whether you’re a US expat, a resident alien, or you have a foreign business, Wise can be an excellent option. With a Wise account, you can either pay your taxes from abroad or receive your tax refund easily. And if you manage more than one currency, you’ll save a lot on exchange rate markups and conversion fees.

When you fill out your tax forms, use your Wise USD Account and routing number.

You can find them under “Account Details.” This will let you:
Use direct debit to pay your taxes straight from your Wise account, avoiding the fees from other payment methods offered by the IRS Set up a direct deposit, the fastest way to receive your tax refund, to your Wise USD account details

Wise has no subscription fees or minimum balance requirements, and you can set up an account in minutes⁵.

You can send, receive, hold, and spend your money in multiple currencies, always with the real exchange rate and with just a small and transparent fee⁶.

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Does Portugal tax US social security benefits?

You’ll need to report your social security benefits on your Portuguese tax return. This is because social security is classed as taxable income in Portugal.

However, you may qualify for an exception if your income is low enough. Speak to a tax specialist for more information about your tax liabilities in Portugal as a US expat.⁷

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Paying US expat taxes in Portugal can be a complicated process. You’ll need to ensure you submit your tax return on time and consider any additional taxes, such as VAT, dividend tax, and property tax.

Speak to a Portuguese tax expert for advice and support. You can also make the most of any tax breaks in both Portugal and the US to save on your tax bill.

If you’re moving abroad, don’t forget about exchange rate costs. Many banks or transfer providers will charge a markup for foreign payments, but not Wise.

To pay your US or Portuguese taxes at the fair mid-market exchange rate, check out Wise.

Sources

1. Portutax - How to file your tax return in Portugal
2. Digital Emigre - Taxes in Portugal for foreigners (2025)
3. Bright!Tax - Taxes in Portugal for expats
4. PWC - 2025 tax guide - VAT
5. Eligibility claim is subject to verification of customers identity
6. Please see Terms of Use for your region or visit Wise Fees & Pricing for the most up to date pricing and fee information
7. Dimov Tax - US social security benefits: and taxation in Portugal

Sources checked 06/19/2025