Swedish retirees in Portugal now have to pay taxes in Sweden

  • ECO News
  • 4 March 2022

Sweden decided to tear up the tax agreement that existed between the two countries and will now charge income taxes to Swedish retirees living in Portugal.

Faced with the inaction of the Portuguese government, Sweden tore up the tax agreement that existed between the two countries and will now charge income taxes to Swedish retirees living in Portugal. It was in January that pensioners began paying taxes to the Swedish Treasury, instead of being exempt from any taxes as was the case until now (both in Sweden and Portugal), according to Público on Friday.

However, as Portugal has changed the rules of the Non-Habitual Resident (NHR) Regime, these pensioners will be subject to a tax rate of 10%, but to avoid double taxation, the tax paid in Sweden will be deducted. This happens to retirees who are still taking advantage of the 10-year NHR regime.

In question are about 1,300 Swedish pensioners who joined Portugal’s Non-Habitual Resident Regime, according to data from 2017.