Tax Treaty Case Law around the Globe 2016

S. 385Chapter 33 Portugal: Non-Discrimination and Access to Domestic Law Incentives for Individuals in the Residence State

João Félix Pinto Nogueira

33.1. Introduction

Nowadays, each country tries to position itself as a competitive jurisdiction in the international scenario. Portugal is no exception and has lately become a very attractive jurisdiction, in particular, in what concerns (wealthy retired) individuals. There are several non-tax reasons behind this, such as the excellent weather, the low cost of living, the peacefulness (besides the absence of internal territorial tensions, Portugal is not seen as a likely target of future terrorist attacks) and the friendliness of the people. And the gastronomy – we should always highlight this particular factor.

Lately, there are also sound tax reasons. Portugal has recently approved a regime for non-habitual tax residents. Any individual moving its tax residency to Portugal may qualify if not resident here in the previous 5 years. Provided that all the conditions are met, a partial or full exemption of the taxpayer’s income will be available.

This regime is boosted by pension clauses included in some of Portugal’s treaties, attributing exclusiv...