Tax on Foreign Pensions in Portugal for Americans and Britons

Yes, in most cases. If you are a tax resident of Portugal, the Portuguese income tax code (CIRS) taxes your income wherever it arises, and pensions are a category of their own, category H. Whether Portugal, the United States or the United Kingdom has the right to tax a particular pension depends on the treaty between the two countries and, for Americans, on the saving clause.

This guide follows the official texts: the Portuguese tax code on the Tax Authority’s site, the 1994 US-Portugal convention and its Treasury explanation, the 2025 UK-Portugal convention, and the IRS and GOV.UK pages. It is an overview of what those pages say on the day we read them, not tax advice. Whether you are a tax resident at all is the first question, and article 16 of the code, described in the first section below, is where it starts.

Does Portugal tax a pension paid from abroad?

The CIRS says that income tax applies to the annual income of six categories, with pensions as category H, and that income is taxed “whatever the place where it is obtained”, in cash or in kind (article 1). Article 13 says that people who reside in Portuguese territory are subject to the tax, and so are non-residents who obtain income there. Residence is defined in article 16: more than 183 days of presence in any 12-month period beginning or ending in the year, or, with fewer days, having a home on any day of that period in conditions that suggest an intention to keep and occupy it as a habitual residence.

The consequence follows from those texts: a resident who receives a pension from the United States or the United Kingdom is within the scope of the Portuguese tax on it, subject to any treaty. The article numbering and the wording come from the AT’s page for each article; none of these pages shows a “last updated” line, only the notes on amendments.

What counts as a pension in the Portuguese code?

Article 11 lists what the code treats as pensions:

Two further rules in the same article matter for a foreign pension. Buying out a pension or any other way of bringing forward the availability of the income does not change its nature as a pension (paragraph 2). And the income is taxable when it is paid or made available to the holder (paragraph 3).

Article 53 sets a deduction for category H: annual gross pension income up to the amount in article 25(1)(a) is deducted in full, and above that the deduction equals that amount. Paragraph 7 excludes from this deduction temporary or lifetime annuities that do not pay pensions under article 11(1)(a) to (c). Article 25(1)(a) states it as 8.54 times the value of the IAS, in the wording of Law 45-A/2024 of 31 December. We did not read the euro value of the IAS, so we do not give a figure, and we do not state any tax rate: the pages above do not set them out in a way we could cite here.

What does the US-Portugal treaty say about pensions?

The IRS page for Portugal lists the income tax convention of 1994 and a technical explanation, and the page was last reviewed on 8 August 2026. The pension rules are in Article 20 of the convention, “Pensions, Annuities, Alimony, and Child Support”.

For an American living in Portugal, a private pension for past work is therefore, on the face of the treaty, taxable in Portugal as the country of residence. The saving clause changes the picture for US citizens. It says that, notwithstanding any provision of the convention except listed ones, a country may tax its residents, and the United States may tax its citizens, “as if the Convention had not come into effect”. The Treasury’s technical explanation states the result for Article 20 directly: in general the United States may tax its citizens and residents on pensions, annuities and alimony without regard to any restriction in Article 20. The exceptions to the saving clause include paragraph 1(b) and paragraph 4 of Article 20 and the relief from double taxation in Article 25.

The treaty does not name a 401(k) plan, an IRA or a pension from a US state; it uses general terms. We found nothing on the pages we read that classifies any of these, so ask the tax authority or a Portuguese tax professional before assuming one treatment.

What about US Social Security?

The treaty’s Article 20(1)(b) lets the paying country tax social security benefits paid to a resident of the other country or to a US citizen. The Treasury explanation adds that such payments “may be taxable in both Contracting States” and that the country of the recipient’s residence gives relief from double taxation under Article 25.

The IRS side is shorter. Its Publication 54 (revised December 2025) says benefits received by U.S. citizens and resident aliens may be taxable depending on total income and filing status, and that under certain treaties U.S. social security benefits are exempt from U.S. tax if taxed by the country of residence. The Portugal text we read has no such exemption in Article 20(1)(b). IRS Topic 423, last reviewed on 7 October 2026, says benefits are not taxable unless the sum of your modified adjusted gross income plus half of your benefits is above the base amount for your filing status. It sends readers to Publication 915 for the calculation, which we did not read.

On the Portuguese side, article 11 lists old-age, disability and survivor pensions and “others of the same nature” as category H. The pages we read do not say in so many words that a US social security payment is category H income; that is our reading of the list, so confirm it with the authority.

What does the IRS say about US tax on a pension abroad?

The rules in our guide on US taxes for Americans abroad apply here. The IRS says U.S. citizens and resident aliens living abroad are taxed on worldwide income. Two points concern pensions:

• Foreign earned income exclusion. The IRS lists what is not foreign earned income, and the list includes “pension or annuity payments, including social security benefits”. The exclusion therefore does not reduce tax on a pension.
• Foreign tax credit. The IRS says that if you paid or accrued foreign taxes and are subject to U.S. tax on the same income, you may take a credit or an itemized deduction, and that a credit is usually to your advantage. If a treaty gives you a reduced foreign rate, only the reduced tax qualifies for the credit.

The treaty adds its own relief for citizens. Article 25(2) says that for a US citizen who is a resident of Portugal, income the United States can tax solely by reason of citizenship is deemed to arise in Portugal to the extent necessary to avoid double taxation, provided the US tax is not less than it would be if the person were not a citizen.

What does the UK-Portugal convention say about pensions?

GOV.UK shows two conventions on its Portugal tax treaties page, last updated on 8 January 2026. The 1968 convention is marked not in force. The 2025 convention was signed in London on 15 September 2025 and entered into force on 29 December 2025. GOV.UK gives its effect: in the UK from 1 January 2026 for taxes withheld at source and from 6 April 2026 for Income Tax and Capital Gains Tax, in Portugal from 1 January 2026 for taxes withheld at source and other taxes.

Article 17 of the 2025 convention reads: “Subject to the provisions of paragraph 1 of Article 18, pensions and other similar remuneration paid to a resident of a Contracting State, shall be taxable only in that State.” For a Briton resident in Portugal, a private or workplace pension paid from the UK is on the face of that text taxable only in Portugal. GOV.UK gives the effective dates as 1 January 2026 in Portugal and 6 April 2026 for UK Income Tax; earlier years fell under the 1968 convention, which we did not read. Article 18 is the exception for government service: such pensions are taxable only in the paying country, but where the person is not a national of the paying country and is a national of the other, they may be taxed in both. A civil service pension is the typical case; GOV.UK says most UK government pensions are only taxed in the UK.

The convention’s Article 20 treats income not dealt with elsewhere as taxable only in the country of residence. We did not compare the 2025 text with the 1968 convention, so this guide does not say what changed.

What about the UK State Pension?

Two GOV.UK pages speak to it and they are worded differently. The page on UK income for people living abroad says non-residents do not usually pay UK tax on the State Pension. The State Pension page says that if the country you live in has a double taxation agreement with the UK, you only pay tax on your pension once, to the UK or to the country where you live, depending on that agreement. Article 17 speaks of “pensions and other similar remuneration”, and neither page says whether the State Pension falls under it. Treat it as open until you have confirmed it with HMRC or a Portuguese adviser.

How is double taxation relieved?

In Portugal. Article 81 of the CIRS gives holders of income obtained abroad a credit for international double taxation. It is limited to the lower of the foreign income tax paid and the part of the Portuguese tax that corresponds to that foreign income, and where a treaty exists it cannot exceed the tax paid abroad as the treaty allows (paragraph 2). If the credit cannot be used because the Portuguese tax is too low that year, the balance may be deducted in the following five years (paragraph 3). Under paragraph 10, where a treaty applies the credit method in the source country, you do not get this credit as well. The US treaty’s Article 25(3)(a) and the UK convention’s Article 21(1) say the same in treaty terms: Portugal deducts the tax paid in the other country, up to the Portuguese tax attributable to that income.

In the UK. GOV.UK says you may be taxed on your UK income by both the UK and your country of residence, and that if there is a double taxation agreement you can apply for partial or full relief before you are taxed, or a refund after. The page lists forms for several countries, Portugal is not among them, and it says that if you live elsewhere you use HMRC’s standard claim form and send it to the tax authority of the country where you live. If you are a British citizen, GOV.UK also says you get a Personal Allowance on UK income, which you claim with form R43 after each tax year.

In the US. The foreign tax credit above, claimed on Form 1116 (the IRS page names it), and the treaty relief in Article 25.

When and how do you declare it in Portugal?

Article 57 requires an annual return in the official form, on the previous year’s income. Article 60 sets the period: electronic filing from 1 April to 30 June. Where you receive foreign income for which you have a right to a double taxation credit, but the amount is not fixed in the source country by 30 June, the period is extended to 31 December of that year; you must tell the tax authority within the normal period, stating the nature of the income and the source country. The pages do not tell us which annex of the return carries a foreign pension, so we do not name one. A Portuguese tax number is needed first; see how to get a NIF.

What does this guide not cover?

• The former non-habitual resident regime and its successor. The CIRS pages we read show provisions on the former regime repealed by Law 82/2023 of 29 December 2023, with a transitional article keeping the old rules for taxpayers who met stated conditions. We did not read the regime’s rules, so we do not describe them.
• Tax rates and amounts. No rate, bracket or euro threshold is given.
• Whether you are a tax resident. Article 16 of the CIRS, summarized above, is the starting point.
• Pension accounts under US reporting rules such as FBAR and Form 8938; our US taxes guide covers them.
• Third-country pensions and pensions from public bodies beyond the government service articles quoted.

If your income is a pension that qualifies you for a residence visa, the proof requirements are in the retirement and passive income visa guide. If you also work, see working in Portugal, and for the first tax steps see the first-month paperwork.

Related guides on this site: how Portuguese tax residence works; the U.S.-Portugal tax treaty; UK taxes and HMRC for Britons living in Portugal; the UK State Pension in Portugal.

More guides on this site: the IFICI regime for new residents; IRAs and 401(k)s; receiving U.S. Social Security in Portugal.

What changed most recently?

The newest information on the pages we rely on is IRS Topic 423, last reviewed on 7 October 2026. The newest legislative event is the 2025 UK-Portugal convention, in force since 29 December 2025 and effective for UK Income Tax from 6 April 2026, which GOV.UK shows on a page updated on 8 January 2026. On the Portuguese code, the pages show their latest amendments as Law 45-A/2024 of 31 December 2024 for articles 25 and 53 and Decree-Law 13/2025 of 6 March 2025 for article 57; the Tax Authority’s pages can lag the law.

Official pages read for this guide: CIRS articles 1, 11, 13, 16, 25, 53, 57, 60 and 81 on the Portuguese Tax Authority’s site; the IRS pages on the Portugal treaty documents, tax treaties, the foreign earned income exclusion, the foreign tax credit, Topic 423 and Publication 54; the US-Portugal convention and the Treasury technical explanation; HMRC’s Portugal tax treaties page and the 2025 UK-Portugal convention; and the GOV.UK pages on UK income if you live abroad (overview, Personal Allowance, taxed twice) and on tax on the State Pension abroad. All were read on 18 October 2026.