Tax on Pensions.
#1
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Tax on Pensions.
There is can article on today's Algarve Daily news that should concern those who either have or are considering NHR status.
#2
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Location: Viana do Castelo
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Re: Tax on Pensions.
No need to rush out and buy the newspaper.
https://algarvedailynews.com/news/12...eign-residents
https://algarvedailynews.com/news/12...eign-residents
#3
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Location: Algarve, Portugal.
Posts: 4,478
Re: Tax on Pensions.
... Well, one way or another I suppose it was inevitable.
Depending on how things go in 'the negotiations' it might end up being punitive;- leading to expats being caught in a nutcracker - pay a punitive rate in Portugal, or move back and buy a place in the UK... some hope - seen the prices? .
Depending on how things go in 'the negotiations' it might end up being punitive;- leading to expats being caught in a nutcracker - pay a punitive rate in Portugal, or move back and buy a place in the UK... some hope - seen the prices? .
#4
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Location: Burgau Portugal
Posts: 462
Re: Tax on Pensions.
This article is less pessimistic, saying...
"The Government's project will be to implement a fixed rate of between 5% and 10%, but only for future residents, not changing the status of current foreign pensioners living in the country"
That is still a good deal for people retiring to Portugal.
OE 2018: Governo pondera cobrar IRS a reformados estrangeiros – O Jornal Económico
"The Government's project will be to implement a fixed rate of between 5% and 10%, but only for future residents, not changing the status of current foreign pensioners living in the country"
That is still a good deal for people retiring to Portugal.
OE 2018: Governo pondera cobrar IRS a reformados estrangeiros – O Jornal Económico
#5
Re: Tax on Pensions.
No need to rush out and buy the newspaper.
https://algarvedailynews.com/news/12...eign-residents
https://algarvedailynews.com/news/12...eign-residents
I wouldn't even read it for free. It's a dreadful distorter of the facts - this article being a prime example. No wonder so many Brits here get the wrong impression of the rules and regs, amongst other things.
#6
Re: Tax on Pensions.
This article is less pessimistic, saying...
"The Government's project will be to implement a fixed rate of between 5% and 10%, but only for future residents, not changing the status of current foreign pensioners living in the country"
That is still a good deal for people retiring to Portugal.
OE 2018: Governo� pondera cobrar� IRS� a reformados� estrangeiros – O Jornal Económico
"The Government's project will be to implement a fixed rate of between 5% and 10%, but only for future residents, not changing the status of current foreign pensioners living in the country"
That is still a good deal for people retiring to Portugal.
OE 2018: Governo� pondera cobrar� IRS� a reformados� estrangeiros – O Jornal Económico
#7
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Posts: 569
Re: Tax on Pensions.
People with a Dutch (private) pension living in Portugal, pay income tax in Holland on their pension if they are NHR. The tax treaty between the Netherlands and Portugal prevents Dutch to take advantage of the NHR. The Dutch government was afraid that all the Dutch would emigrate to Portugal.
When Portugal will tax pensions as of 2018, Dutch will pay income tax on their private pension in Portugal and not in Holland. Maybe not bad for the Dutch .....
In fact for a lot of Dutch a Portuguese tax on pensions under NHR of 5 to 10% would be better !! In that case there is no tax due in Holland (tax treaty with Holland).
We want to emigrate to Portugal in January 2018. I really hope this new tax would be in place for us by then.
When Portugal will tax pensions as of 2018, Dutch will pay income tax on their private pension in Portugal and not in Holland. Maybe not bad for the Dutch .....
In fact for a lot of Dutch a Portuguese tax on pensions under NHR of 5 to 10% would be better !! In that case there is no tax due in Holland (tax treaty with Holland).
We want to emigrate to Portugal in January 2018. I really hope this new tax would be in place for us by then.
Last edited by Pilou; Sep 17th 2017 at 9:04 pm.
#8
Re: Tax on Pensions.
People with a Dutch (private) pension living in Portugal, pay income tax in Holland on their pension if they are NHR. The tax treaty between the Netherlands and Portugal prevents Dutch to take advantage of the NHR. The Dutch government was afraid that all the Dutch would emigrate to Portugal.
When Portugal will tax pensions as of 2018, Dutch will pay income tax on their private pension in Portugal and not in Holland. Maybe not bad for the Dutch .....
In fact for a lot of Dutch a Portuguese tax on pensions under NHR of 5 to 10% would be better !! In that case there is no tax due in Holland (tax treaty with Holland).
We want to emigrate to Portugal in January 2018. I really hope this new tax would be in place for us by then.
In fact for a lot of Dutch a Portuguese tax on pensions under NHR of 5 to 10% would be better !! In that case there is no tax due in Holland (tax treaty with Holland).
We want to emigrate to Portugal in January 2018. I really hope this new tax would be in place for us by then.
Last edited by Red Eric; Sep 18th 2017 at 6:54 am.
#9
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Joined: Jul 2017
Location: Algarve
Posts: 569
Re: Tax on Pensions.
The word "OR" in article 18, 2b gives the answer, Eric.
#11
Re: Tax on Pensions.
We'll see.
It looks to me as though you're only good for PT NHR with a pension from Holland if that pension is under 10,000€, which is already the case (unless you engineer some sort of elaborate get-out, which, given the number of Dutch pensioners who are reported to be benefitting, must somehow be possible).
I don't see how, according to the terms of the treaty, PT introducing a very low tax changes that, since low tax rates / tax on only a part of the pension is specifically catered for in terms of giving the Dutch the right to tax as well.
I don't think the wording of the new PT law will alter anything - it's the rate of tax that matters and how it relates to normal PT taxation rates.
It looks to me as though you're only good for PT NHR with a pension from Holland if that pension is under 10,000€, which is already the case (unless you engineer some sort of elaborate get-out, which, given the number of Dutch pensioners who are reported to be benefitting, must somehow be possible).
I don't see how, according to the terms of the treaty, PT introducing a very low tax changes that, since low tax rates / tax on only a part of the pension is specifically catered for in terms of giving the Dutch the right to tax as well.
I don't think the wording of the new PT law will alter anything - it's the rate of tax that matters and how it relates to normal PT taxation rates.
Last edited by Red Eric; Sep 18th 2017 at 7:39 am.
#12
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Location: Algarve
Posts: 569
Re: Tax on Pensions.
Yes, it will depend on the wording of the new law.
Also a recent court case(rechtbank Zeeland) and the court case (HOF Arnhem) will explain more in the near future, although this was not in a NHR-situation.
Also a recent court case(rechtbank Zeeland) and the court case (HOF Arnhem) will explain more in the near future, although this was not in a NHR-situation.
#14
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Re: Tax on Pensions.
A man with a Dutch pension was taxed in Portugal on only 15% of that pension. The Dutch tax inspector taxed the whole pension in Holland, because less than 90% of his pension was taxed.
The first court's decision: the tax inspector did the right thing: tax in Holland. Then the appeal at Hof Arnhem in 2015:
article 18: it does not matter if in Portugal a 85% deduction took place. The only thing is that the pension is taxed in theory and that is the case (onderworpenheidsbeginsel). So Holland was not allowed to tax his pension.
Now we are waiting the appeal of the decision (2017) of the court in Zeeland. Wait and see.
These court cases were not NHR cases.
So 2 court cases and a complete different approach on the same article 18.
When there will be a new law, new court cases will follow in the future. What is normal income tax .........?
The first court's decision: the tax inspector did the right thing: tax in Holland. Then the appeal at Hof Arnhem in 2015:
article 18: it does not matter if in Portugal a 85% deduction took place. The only thing is that the pension is taxed in theory and that is the case (onderworpenheidsbeginsel). So Holland was not allowed to tax his pension.
Now we are waiting the appeal of the decision (2017) of the court in Zeeland. Wait and see.
These court cases were not NHR cases.
So 2 court cases and a complete different approach on the same article 18.
When there will be a new law, new court cases will follow in the future. What is normal income tax .........?
Last edited by Pilou; Sep 18th 2017 at 8:01 am.
#15
Re: Tax on Pensions.
But the new law will only amend the PT NHR law, not the tax treaty. The principles over which the Dutch courts are deciding remain the same and embedded in the dual taxation treaty, which will remain unaltered.