GOVERNMENT ADMITS IT WANTS TO TAX FOREIGN PENSIONERS

Towards the end of RNH for retirees?

The RNH, which allows foreign pensioners to benefit from a total exemption from income tax on their private-sector pensions, has come in for some criticism in recent years not only from Portuguese taxpayers, but also from certain politicians and political parties.

As part of the State budget 2020The government has admitted that it is looking into the possibility of ending RNH status, with the latter due to come into force in 2020. Foreign pensioners will be subject to a tax of between 15 % and 20 %.

Is this the end of RNH for foreign retirees?

Foreign pensioners to be taxed

After an in-depth modification of the RNH for assets the Portuguese government has decided to attack the RNH scheme for pensioners.

Foreign pensioners living in Portugal under the RNH scheme currently benefit from a double exemption from the IRS. In practical terms, this means that they pay no income tax in the country where they receive their pension and in Portugal. Of course, this pension has to come from the private sector.

The Portuguese Ministry of Finance has been advocating a change to this RNH scheme since 2016, however the Prime Minister has always opposed the change. According to Eco newspaperThe SP obtained a guarantee that the RNH would be re-examined and that measures would be taken in 2020, or at the latest at the end of Antonio Costa's term of office (2023).

A tax of between 15 and 20 %

The government would like to create a specific scale for foreign pensioners between 15 and 20%. Rest assured, those who already benefit from this status will not be affected. Only those who apply in 2020 will be affected by this reform of the law.

Of course, this assumption is valid, provided that this reform is passed in the 2020 finance budget.