Banking, pensions and tax in Portugal
Portugal taxes residents on worldwide income, so foreign pensions are taxed at 12.5% to 48% in 2026; the NHR regime closed to newcomers in 2024 and its replacement excludes pensions.
How your pension reaches a Portugal bank, what Portugal taxes, and what you still report at home. Checked against official sources on Oct 8, 2026.
- Tax on a foreign pension
- 12.5% to 48% Foreign pensions are taxed. PwC Tax Summaries. Checked Oct 8, 2026.
- Top rate, local income
- 48% Over €86,634. PwC Tax Summaries. Checked Oct 8, 2026.
- US Social Security
- Direct deposit SSA POMS. Checked Oct 8, 2026.
- UK State Pension
- Uprated yearly GOV.UK. Checked Oct 7, 2026.
- Canada OAS
- Agreement Canada.ca. Checked Oct 8, 2026.
- US FBAR
- Over $10,000 Combined foreign accounts at any time in the year. FinCEN. Checked Oct 7, 2026.
Getting your pension paid in Portugal
United States
Social Security
Yes. Social Security can be paid straight into an account at a bank in Portugal: the Social Security Administration routes international direct deposits through the Federal Reserve Bank of Kansas City and a processor bank in Portugal, and has a sign-up form for Portugal (SSA-1199-PE).
SSA POMS. Checked Oct 8, 2026.
United Kingdom
State Pension
It can be paid into a bank in Portugal or a UK account. Portugal is in the European Economic Area, so the pension rises every year as it would in the UK.
GOV.UK. Checked Oct 7, 2026.
Canada
Old Age Security
Paid while you live outside Canada only if you lived in Canada for at least 20 years after age 18. Canada and Portugal have a social security agreement, in force since May 1, 1981, so years you lived in Portugal after 18 can count as residence in Canada to help you qualify.
Canada.ca. Checked Oct 8, 2026.
Other countries: check whether your pension can be paid abroad, whether it keeps rising with inflation there, and whether your country has a social security agreement with Portugal.
How Portugal taxes you
You become a Portuguese tax resident if you spend more than 183 days in Portugal in any 12-month period, or if you keep a home there that you intend to use as your main residence. Residents pay tax on worldwide income at progressive rates from 12.5% to 48% in 2026, plus a solidarity surcharge of 2.5% to 5% on income over €80,000. Pensions, including foreign pensions, are taxed at these normal rates, after €4,587.09 of pension income that is tax exempt. Capital gains are generally taxed at a flat 28%. The non-habitual resident (NHR) regime, which taxed foreign pensions at 10%, was revoked from 1 January 2024 and stays only for people who registered or qualified before then. Its replacement, the scientific research and innovation incentive (IFICI), covers eligible work activities and excludes foreign pension income. The income tax scale:
| Taxable income | Rate |
|---|---|
| Up to €8,342 | 12.5% |
| €8,342 to €12,587 | 15.7% |
| €12,587 to €17,838 | 21.2% |
| €17,838 to €23,089 | 24.1% |
| €23,089 to €29,397 | 31.1% |
| €29,397 to €43,090 | 34.9% |
| €43,090 to €46,566 | 43.1% |
| €46,566 to €86,634 | 44.6% |
| Over €86,634 | 48% |
PwC Tax Summaries. Checked Oct 8, 2026.
What US citizens still report
US citizens file a US return on worldwide income wherever they live; the US has an income tax treaty with Portugal, which can decide which country taxes some income. Two reports cover money held abroad:
| FBAR (FinCEN Form 114) | Over $10,000 combined, any time |
| Form 8938, single, living abroad | Over $200,000 at year end or $300,000 any time |
| Form 8938, married filing jointly | Over $400,000 at year end or $600,000 any time |
FinCEN; IRS. Checked Oct 7, 2026.
Pension and tax questions
Can I get US Social Security paid in Portugal?
Yes. Social Security can be paid straight into an account at a bank in Portugal: the Social Security Administration routes international direct deposits through the Federal Reserve Bank of Kansas City and a processor bank in Portugal, and has a sign-up form for Portugal (SSA-1199-PE).
Will my UK State Pension go up each year in Portugal?
It can be paid into a bank in Portugal or a UK account. Portugal is in the European Economic Area, so the pension rises every year as it would in the UK.
Is my pension taxed in Portugal?
Yes. Portugal taxes residents on worldwide income, so a foreign pension is taxed at the normal progressive rates of 12.5% to 48%, after €4,587.09 of pension income that is tax exempt. The 10% NHR rate on foreign pensions closed to new residents from 2024, and the IFICI regime that replaced it does not cover pensions.
Do I still file a US tax return?
Yes, US citizens file on worldwide income wherever they live, and report foreign accounts on an FBAR once they pass $10,000 combined at any point in the year.
Can a new retiree still get the NHR tax regime in Portugal?
No. The NHR regime was revoked from 1 January 2024. It still applies to people who were registered, or met the conditions to register, by 31 December 2023, and in some cases to people who became resident during 2024.
How are foreign pensions taxed in Portugal?
A resident's foreign pension is taxed at the normal progressive rates, from 12.5% to 48% in 2026, after €4,587.09 of pension income that is tax exempt. The IFICI regime for newcomers excludes pension income.
Can I get Social Security paid into a Portuguese bank?
Yes. The Social Security Administration pays by international direct deposit to banks in Portugal and has a sign-up form for Portugal, SSA-1199-PE.
