Portugal vs Germany tax in 2026: what a German in Portugal pays, and where

Residence: Wohnsitz against the 183 days

Germany keeps taxing anyone who retains a Wohnsitz — a dwelling kept and used — or a habitual abode of more than six months. Portugal taxes anyone who spends more than 183 days here in a twelve-month window or keeps a home that looks like a habitual residence (IRS Code, art. 16.º). A German who keeps the flat in Munich “for visits” is resident in both countries, and article 4 of the 1980 convention breaks the tie: permanent home, then centre of vital interests, then habitual abode, then nationality.

The clean move is the one where the German dwelling is sold or let on a proper lease, the Abmeldung is filed, and the Portuguese address is registered at Finanças on arrival. Half-measures produce two tax residences and years of correspondence.

• Since 8 October 1982 the convention applies — old, OECD-style, no government-pension exception
• Pensions: Portugal only (art. 18) once you are resident here and Portugal actually taxes them
• 15 % / 10–15 % / 10 % treaty ceilings on dividends, interest, royalties
• Exit tax on German shareholdings of 1 % or more when you leave (AStG § 6)

Income tax, side by side

Portugal is cheaper at the top (48 % against 45 % plus Soli, but without church tax) and more expensive in the middle: 34,9 % applies from 29 397 € of taxable income, where Germany is around 30 % marginal. For a couple the two splitting systems roughly cancel out. The comparison with worked examples is on the income tax page.

The 1980 convention, article by article

• Dividends (art. 10): 15 % at source. Interest (art. 11): 10 % when paid by a bank, 15 % otherwise. Royalties (art. 12): 10 %. Portugal’s domestic 28 % is cut to these ceilings for a German resident; a Portuguese resident receiving German dividends pays 15 % to Germany and 28 % here with credit.
• Employment (art. 15): taxed where the work is done; 183-day exception for short assignments.
• Pensions (art. 18): pensions for past employment are taxable only in the residence state. The convention has no separate rule for government-service pensions — article 19 covers salaries only — so a Beamtenpension follows the same road as a company pension. Statutory pensions from the Deutsche Rentenversicherung and payments from professional provident funds fall, according to the Bundesfinanzhof, under article 22 (other income), which also gives Portugal the exclusive right — unless Portugal does not tax the income, in which case the right falls back to Germany (art. 22 (1), second sentence). That sentence is what let Germany tax the pensions of NHR residents; for anyone arriving since 2024, Portugal taxes and Germany must not. Details on the German pension page.
• Capital gains (art. 13): property where it stands; everything else only in the residence state.
• Method (art. 24): Portugal credits German tax. Germany exempts Portuguese-source income it may not tax (with progression) and credits Portuguese tax on dividends, interest and royalties — deemed to be at least 15 %.

Leaving Germany: the exit tax and the five-year shadows

• Wegzugsbesteuerung (AStG § 6): anyone who was fully taxable in Germany for at least seven of the last twelve years and holds 1 % or more of a company — the family GmbH, a start-up stake — is taxed on departure as if the shares were sold at market value. The tax can be paid in seven annual instalments on request, usually against security, EU destination or not. Selling before leaving, or restructuring the holding, is decided before the Abmeldung, not after.
• Inheritance tax: German citizens remain subject to unlimited German inheritance and gift tax for five years after giving up their German residence (ErbStG § 2). Portugal has no inheritance tax between spouses, children and parents. See inheritance planning.
• Property in Germany: gains on a property sold within ten years of purchase are taxable in Germany (EStG § 23, self-used homes excepted), and the convention leaves German property to Germany; Portugal then taxes half the gain with credit. See capital gains on German property.

Social security

Both countries are in the EU coordination system (Regulation 883/2004): one legislation at a time, A1 certificates for postings of up to 24 months, pension periods added together, the German Rente paid in full to Portugal. A German employee of a Portuguese company pays 11 % (employer 23,75 %); the self-employed pay 21,4 %. Contribution rates in Germany in 2026 — pension 18,6 %, health 14,6 % plus the fund’s supplement, care 3,6 %, unemployment 2,6 %, each split between employer and employee — are compared on the social security page.

Property

IMT by bracket (0 % to 8 %, 7,5 % flat while you are still non-resident since May 2026) plus 0,8 % stamp duty against Grunderwerbsteuer of 3,5 % to 6,5 % depending on the Land; IMI at 0,3–0,45 % of a formula value against the reformed Grundsteuer; no AIMI equivalent in Germany. The property tax page has the 2026 brackets and examples.

Special regimes

NHR closed on 1 January 2024. Germans arriving now can use IFICI — 20 % for ten years on Portuguese income from listed activities, foreign income exempt with progression — if they take a qualifying job and were not resident here in the previous five years. Read the NHR and IFICI page for Germans before assuming anything: the German subject-to-tax clause means income Portugal exempts under IFICI can be taxed in Germany if it is German-source.

Before you move

Questions from German clients