Pilou

Of course, only the Portugese law will change. A change in a tax treaty is a very difficult and long procedure. That is not on the agenda.

The courts in Holland apply the tax treaty and give an explanation of the wording. As you know the 90% - rule gives opposite court decisions. Amazing. This has an effect on wether Holland may tax a pension or not.

But one way or the other, we will emigrate to the Algarve in a couple of months and no tax can change that! Too beautiful!!

Red Eric

Actually, I didn't know that And from a very superficial bit of searching, it appears this was one of those - how shall we say? - "less straightforward" arrangements on the part of the pensioner. It also looks as though that particular method of benefitting was dealt with at this end by a change in PT tax law which became effective in 2015.

Diddion

It would remain a good deal. I am also, for the sake of my own peace of mind (retiring to Portugal in 2018) making my own calculations on the basis that I am taxed at normal Portuguese rates, as a worst-case scenario. Can anyone answer any of these, for a Portuguese-resident expat without NHR?

Is the 85% deduction standard, or are there circumstances where it might not apply?
Does it apply to personal pensions, state pension and occupational pension?
Can one take income by drawdown from a uk pension plan, and if so would it be correct to assume that the taxable amount would be on 15% of drawn funds?
And if you can suggest any reliable links where these things are discussed I would be very grateful!

Red Eric

No, it's not.

On a normal pension arrangement, where you're receiving a regular payment from a company or public service superannuation scheme or from a state pension, you pay the same rates of tax on all of that income as you would if it was earned income in Portugal.

Diddion

Thanks, Red Eric. Are there any situations where 15% of the pension income is taxed, or is that point in one of the previous posts (no 14 from Pilou) perhaps incorrect, or applies in a limited manner? Apologies to Pilou, though, if I have misunderstood what you wrote!

Pilou

Diddion, the 85% deduction on pensions was a long time ago. Later this was changed in 65% deduction. That was also a couple of years ago. I found this info in court cases in the Netherlands. I don't know wether this is still the case.

Here is a link about the 85% tax exemption.
Tax Profile on Pensions for Portuguese Residents
Maybe you can find out more on google.

Red Eric

It looks as though it might still be applicable under certain circumsances, given that it gets a mention on this government-backed website on a page dated August 2017.

Goodness knows what you have to do with your pension (or even whether you can do it with with the type of pension(s) you have) to get it to qualify, though. I expect the financial advisors will tell you, for a fee.

NewDetail

Diddion

Thanks, Pilou. I've been Googling like mad, and haven't found any reference to exemptions, at least right now, so perhaps this is, as you may indicate, a historical position. I'll post again if I can gain clarity on this.

Diddion

Thanks also to Red Eric. Still no wiser, though!

Diddion

Some slight clarification, perhaps. This is from a 2014 article in Portugresident.com (Taxation of Income | Portugal Resident. The relevant point is at the very end of the article:

Quote:

However, if certain conditions defined in legislation are met, occupational pensions may benefit from an 85% exclusion to eliminate any underlying double taxation.

So I think we can infer that it does not apply to UK government pension (taxed anyway in the UK) and personal pension plans, and perhaps to any occupational schemes with standard taxation. This would mean that, for example, superannuation schemes would not benefit from that deduction, but I haven't a clue which schemes might benefit.

Pilou

This is what I found:
UK Occupational Pensions. Occupational pension schemes (also called Company Pension schemes) are when the employer organises a pension scheme for its employees.

Diddion

It is somewhat more complicated than that. There are different rules for the two main types of UK pensions, which are occupational schemes and personal pension plans. Occupational schemes are always employer-provided, but personal pension schemes can receive individual contributions or employer contributions.

Pilou

Ok.

GeniB

When we arrived in Portugal in Oct 2010 we were told that the NHR scheme was still being discussed ,but we wouldn't be accepted because our pensions came from the Netherlands and they were vehemently opposed to the scheme(not quite what was said in the Portugal news today,making out that they were only just aware of it)
Swing Green told us that four other Dutch couples were fighting for the right to go on the scheme at that time ,with the Dutch tax offices.
The Dutch meanwhiie had given us six months to provide them with a permanent address for our pensions. We bought a villa and moved in in April 2011, becoming resident in August. We were thus resident on Dec31st so paid tax for 2011. Unbeknown to us at the time, that automatically made us ineligible for NHR... Which I believe had been ratified in the Portuguese political press earlier in the year which then made it legal . Rumour had it that it had been put into practice in Lisbon the previous year however .We were naturally less than pleased with the advice given to us in the Algarve which seemed to be at least six months behind the facts.
I still doubt however that the Dutch tax office would have allowed it anyway .We never heard anything more about the four other couples. success or failure ?
Some of the argument put forward by the Dutch, was about pensions derived from annuities. against those that were from occupational ones
It would seem to me that the Portuguese minister might take a leaf out of the Dutch tax offices book and offer ex-pats a very low tax (in place of the exemption) and for a limited but reasonable period of time 10 + yrs for instance.(altho I thought this was already part of the NHR's scheme ? not sure This scheme has run in the Netherlands for at least 35 yrs to encouraged highly skilled foreign workers to move there
The tax rate was a straight 35 % then (not bad if you consider that we were paying 71% at one time)
It is a tad galling then that the Dutch are amongst the most vociferous against the Portuguese scheme,especially as they are also notorious for offering 'address's for large companies and pop groups etc to avoid paying tax in their home countries. Hypocrites

Red Eric

Word has it that the government have not included any changes to NHR in the 2018 budget and have postponed any decisions on the matter until a discussion on such schemes in general in the EU has taken place.