How are foreign pensions taxed in Portugal after NHR?

For a retiree, this is the single biggest change of the last few years. The old 10 percent flat rate on foreign pensions is gone for anyone arriving now.

What happened, and when

NHR closed to new tax residents on 1 January 2024, with a transitional window for late registrations that ended on 31 March 2025. People already inside the regime keep their terms for the full ten years, some as far as 31 December 2033: registrants before April 2020 keep a full exemption on foreign pensions, and those who registered between April 2020 and January 2024 keep the 10 percent flat rate.

IFICI, the regime that replaced it, exempts foreign source income but names pensions as an exception. So a new resident with a foreign pension is taxed on it like any other Portuguese resident.

The ordinary treatment

Pension income is Category H. A specific deduction of 4,587.09 euros comes off first in 2026, then the balance runs through the progressive brackets alongside your other income: 12.5 percent on the first 8,342 euros, 34.9 percent from 29,397 to 43,090, 48 percent above 86,634. The solidarity surcharge adds 2.5 percent above 80,000 euros of taxable income.

Which country gets to tax it

That depends on the treaty. Under the UK Portugal convention signed on 15 September 2025, in force since 29 December 2025 and effective in Portugal from 1 January 2026, UK state and private pensions are taxable only in Portugal (Article 17), while UK government service pensions stay taxable only in the UK (Article 18). US Social Security is different again: the treaty lets the US tax it, and Portugal taxes it too as foreign pension income with a credit for the US tax. 401(k) and traditional IRA withdrawals are taxable in Portugal at progressive rates.

What to do about it

Check your own treaty article before assuming anything, run the numbers in the tax estimator, and read the tax guide for expats for the full income by income table.