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Since 2013, foreign pensioners have been exempt from income tax for a period of ten years. This measure was taken by the Portuguese government to help the real estate sector, which was hit hard by the 2008 financial crisis.
Thanks to the “non-resident residents” regime, pensioners from the private sector are exempt from taxing their pensions. Belgium is relieved of the right to levy tax on this pension due to a fiscal agreement concluded between Portugal and Belgium. This special regime was reserved for foreign residents and did not apply to Portuguese pensioners, and that was bad there. The complainants won their case, because the socialist government in Portugal decided to abandon the system of full exemption and opted for a system of flat-rate taxation of 10 percent on the income of foreign pensioners.
At present, the novelty only applies to those who have been installed in Portugal since 1 December 2019. According to the newspaper, around 3,200 Belgian pensioners have settled in Portugal.