Category: Blog

For people relocating from the United States to Portugal, selling a former US home after purchasing a property in Portugal can raise an important Portuguese capital gains tax question: can the gain qualify for Portugal’s main-home reinvestment relief? Article 10(5) of the Portuguese Personal Income Tax Code (CIRS) may provide an argument in favour of…

For U.S. citizens who are tax resident in Portugal, U.S. Social Security can create an unusual double-taxation problem. Both Portugal and the United States may tax the same benefit, but the key question is not simply whether a Foreign Tax Credit, or FTC, is available. The real question is: Which country is required to give…

Introduction A recent decision from the Portuguese Centre for Administrative Arbitration (CAAD) provides important guidance on two key tax issues: (1) the evidentiary value of Modelo 40 bank transaction data in tax audits, and (2) the correct method for calculating VAT when the taxpayer has not charged it to final consumers. The case, Processo n.º 1049/2025-T,…

For Americans living in Portugal, one of the most common sources of confusion is the distinction between dual citizenship and dual tax residency. A U.S.-Portuguese citizen may assume that holding two passports means being tax resident in both countries. That is not necessarily the case. Citizenship, legal residence and tax residence are separate concepts, and…

Updated: August 2026 Portugal introduced a significant package of tax incentives for housing in 2026. The new rules affect property buyers, landlords, real estate investors, developers and individuals building their own permanent home in Portugal. The measures were introduced by Decree-Law No. 97/2026 of 20 May and cover VAT, personal income tax (IRS), property transfer…

Can you avoid Portuguese capital gains tax by reinvesting the proceeds from your home into a PPR? Not necessarily. A Portuguese Tax Authority binding ruling issued on 20 August 2026 — Process No. 26447 — confirms that simply investing the proceeds from the sale of a main home into a PPR or life-insurance product is…

Portugal has enacted an important clarification for property owners, developers, contractors and investors involved in urban rehabilitation projects. Law no. 48/2026, of 17 August, effective from 18 August 2026, confirms that the reduced 6% VAT rate under the former wording of item 2.23 of List I of the Portuguese VAT Code applies to qualifying urban…

A Portuguese Tax Authority binding ruling — Process 27218, dated 22 January 2025 — addressed capital gains from the sale of US Qualified Small Business Stock (QSBS) by a US citizen resident in Portugal under the old NHR regime. The Tax Authority concluded that, because Article 14(6) of the Portugal–US Tax Treaty generally allocates taxation…

Can a US Disregarded LLC Benefit from the Portugal-US Tax Treaty? Yes, potentially. In a significant 2026 Binding Ruling, the Portuguese Tax Authority has clarified that income paid by a Portuguese company to a US Limited Liability Company (LLC) treated as a disregarded entity for US tax purposes may still benefit from the Portugal-US Double…

Moving to Portugal while continuing to operate a US consulting or service business creates a genuinely cross-border tax situation. For a US citizen earning significant business income, electing S Corporation status may appear attractive because part of the company’s profit can potentially be distributed without US Social Security and Medicare taxes. However, once the owner…