WHAT TAXATION FOR YOUR RETIREMENT ONCE EXPATRIATED

TAXATION OF YOUR RETIREMENT IN PORTUGAL

Portugal introduced non-habitual resident status in 2009. This offers the possibility of exempting your retirement pension for a period of 10 years. Provided you have established your tax residence in Portugal.

This measure has been much publicized for several years, but it is important to respect certain rules to avoid having your pension imposed in France.

The bilateral tax treaty

Regarding the tax treaty signed between France and Portugal, it stipulates that the host country taxes private sector pensions, and France taxes public sector pensions. It is therefore important to take into account that retired civil servants cannot benefit from the RNH status.

Have a fiscal residence in Portugal

In order for your pension to be taxed in Portugal and not in France, you must base your tax residence in Portugal. You will have to set up your home and that you do not keep your house in France.

By keeping a home in each state, you jeopardize your expatriation project. LOne of the control elements by the French financial services and the center of your vital interests.

So the 183-day-per-year rule is not enough to stop being a French tax resident!

If you have many questions about your expatriation plans, talk to our tax specialists.

Taxation of your retirement in Portugal for non-residents

The convention provides for an income tax exemption on your pension in Portugal provided that you are truly considered a tax resident there. This means that you will have no choice but to cut your tax ties with France.

It is important to emphasize that the convention established with Portugal stipulates that one must be subject to tax in the host country to be a tax resident there. 

In concrete terms, this means that if you don't pay tax there, France could consider that you are still a French tax resident and tax you.

At the present time, none of our customers knows how to requalify their expatriation to Portugal. However, as each expatriation is different in many respects (taxation, assets, family situation, etc.), we are confident that our customers will find the right solution. 

It might be a good idea to rent out your property (Booking or otherwise) in order to earn rental income, which will of course have to be declared when you file your tax return in Portugal.

Also, if after your departure you continue to receive income in France, it will remain taxable in France only. It is therefore important to take all these elements into account.

As you can see, the taxation of your retirement in Portugal depends on many factors. Every tax system is different, and your expatriation needs to be thought through in advance.