Italians arriving in Portugal usually read about the arrival and not about the exit, which is the wrong way round. Arriving is a date and a form. Leaving is a taxable event, and it is decided by rules that are already running while you are still here.
Arriving: the test that does not care about your passport
Freedom of movement handles the immigration side and changes nothing about tax. CIRS art. 16 asks whether you spent more than 183 days here, consecutive or not, in any 12-month period beginning or ending in the year — or whether you keep a home here in conditions implying you intend to hold it as your habitual residence. There is no third question and a residence certificate is not part of it.
- Residence starts on the first day of the stay (art. 16 n.º 3), backdating to 1 January if you were resident on any day of the previous year.
- It ends on the last day of presence (art. 16 n.º 4).
- Each status in a split year is assessed on its own (art. 15 n.º 3).
From that first day art. 15 n.º 1 taxes worldwide income here. Before it, foreign income is outside Portuguese scope — not exempt, outside. And there is no step-up: an Italian property or portfolio bought in 2011 keeps its 2011 cost and date, so the gain since then belongs to Portugal if you sell as a resident.
The 1980 convention
The convention between Portugal and Italy was approved for ratification by Lei n.º 10/82 of 1 June 1982. Article 18 gives pensions and similar remuneration paid in consequence of past employment to the state of residence alone, subject to article 19(2) — so an Italian private or occupational pension paid to somebody living in Portugal is taxed in Portugal.
It is worth knowing how differently these conventions land, because the intuition that public pensions follow one rule is wrong in every direction. Germany gives its public pensions to the state of residence. France keeps them, unless the retiree is a national of the other state. The United Kingdom keeps them, and lets both states tax where the retiree is a national of the other. Canada shares them with a capped source right. There is no rule of thumb that survives the texts.
Relief, and the paragraph that quietly raises your rate
CIRS art. 81 gives the lesser-of credit: the smaller of the Italian tax actually paid and the fraction of Portuguese tax attributable to that income, capped at the treaty rate under n.º 2 and carried forward five years under n.º 3.
That paragraph is also what makes IFICI work the way it does. Under CIRS art. 81 n.º 4 an IFICI beneficiary's foreign income in categories A, B, E, F and G is relieved by the exemption method with mandatory aggregation for rate purposes — which is a larger benefit than the headline 20% on Portuguese qualifying income, and it is the part most summaries leave out.
Leaving again
Three Portuguese rules run on the way out, and none of them is optional.
| Rule | Effect |
|---|---|
| CIRS art. 10 n.º 25 | A disposal is deemed on loss of residence — a charge on holdings you still own |
| CIRS art. 16 n.º 14 | You stay resident for the whole year of departure where you spent more than 183 days here that year and afterwards received income that would have been taxable had you stayed |
| CIRS art. 16 n.º 16 | Lose residence and regain it during the following year, and you are treated as resident for that whole year |
Note that art. 16 n.º 6, which keeps somebody Portuguese-resident for five years after moving to a blacklisted jurisdiction, is triggered by Portuguese nationality rather than by assets, so it does not reach an Italian national leaving Portugal. The three rules above do.
The annexes
| Item | Where |
|---|---|
| Italian income of any category, and the Italian tax paid | Anexo J |
| Any account held outside Portugal | Folha de rosto, quadro 11 — no income threshold |
| Self-employment carried on here | Anexo B, or C under organised accounting |
| Gains, including crypto | Anexo G, or G1 |
| IFICI or a running NHR | Anexo L |
The window is 1 April to 30 June, and 30 June applies whether or not it falls on a business day — unlike the IVA deadlines, which move to the following Monday. 30 June also closes the joint-or-separate election for a couple, and the default is separate, so missing it makes the choice by omission.
Does registering as an EU citizen in Portugal make me tax resident?
No. Registration is immigration. CIRS art. 16 decides tax residence on days present — more than 183 in any 12-month period — or on keeping a home here in conditions implying you intend to hold it as your habitual residence.
Who taxes my Italian pension?
A private or occupational pension from past employment goes to the state of residence alone under article 18 of the 1980 convention, so Portugal taxes it. A public-service pension is governed by article 19(2), which our copy of the convention could not be read cleanly for — read the original PDF for that paragraph.
Does Portugal give me a new cost base for assets I owned before moving?
No. There is no step-up on arrival. The original acquisition cost and date carry over, so the entire gain since purchase sits in the Portuguese base if you sell while resident here.
What happens if I leave Portugal?
CIRS art. 10 n.º 25 deems a disposal on loss of residence, so leaving is itself a taxable event on some holdings. Art. 16 n.º 14 can keep you resident for the whole year of departure, and art. 16 n.º 16 catches a departure followed by a return during the following year.
Can I leave for a year, sell, and come back?
Art. 16 n.º 16 treats somebody who loses Portuguese residence and regains it during the following year as resident for that whole year. The gain realised in between is caught.
Is exempt foreign income really exempt?
Where the exemption is with progression, the income is not taxed but is compulsorily aggregated under CIRS art. 81 n.º 9 to set the rate applied to your other income. It raises the rate on everything else.
How long can I carry unused foreign tax credit?
Five tax periods, under CIRS art. 81 n.º 3, subject to the same limit as the original credit.