Belgian pensioners lose tax exemption in Portugal
Since 2013, it has been possible for foreign retirees to live tax-free in Portugal. About a thousand Belgians make use of this option.
Belgium has a double taxation treaty with Lisbon, which means that Belgian pensions taxed in Portugal are no longer taxed in Belgium. But Lisbon does not tax the pensions of EU citizens, making Portugal a kind of tax haven for retired people.
The tax break for foreign retirees was created to boost the Portuguese economy. However, critical comments were always made about the unequal treatment of Portuguese and foreign pensioners.
The Portuguese Socialist Party (PS) has now introduced a bill to increase the tax on foreign pensions to 10 percent. This proposal will be voted on shortly as part of the budget for 2020.
The new scheme would only apply to pensioners who subsequently come to live in Portugal. Those who already live there can continue to enjoy the full tax exemption.