German pensions taxed in Portugal: Rente, company and civil-service pensions

Which article covers which pension

The second sentence of article 22 (1) is the whole story of the last decade: where the residence state does not subject the income to tax, the other state may. Under NHR, Portugal exempted foreign pensions (until 2020) or taxed them at 10 % (from 2020 for new registrations) — and the Finanzamt Neubrandenburg taxed the Rente of NHR residents under Germany’s limited liability rules. The Bundesfinanzhof confirmed that reading on 3 September 2025 for a retiree who had moved in 2018 with an exemption.

For anyone who became resident from 2024, there is no exemption: Portugal taxes the pension in full at the progressive rates, and Germany’s right falls away. NHR holders who still have their ten years keep the German letters until the regime expires.

• 4 587 € Portuguese deduction per pensioner, then 12,5 % to 48 %
• 84 % of a statutory pension starting in 2026 is taxable in Germany (for the years Germany may tax); Portugal taxes 100 %
• Finanzamt Neubrandenburg — the single office for pensioners abroad; it stops assessing once Portuguese taxation is proven
• S1 form — SNS cover paid by the German fund for DRV pensioners

What Portugal charges

Pensions are category H. Each pensioner deducts 4 587 € (8,54 × IAS) or, if higher, the compulsory contributions paid; the rest goes through the general table. A couple can file jointly and split.

Rounded, before the personal credits (health, general expenses). Germany would tax only 84 % of a statutory pension starting in 2026 after the 12 348 € allowance; Portugal taxes the full amount — the reason a modest German Rente can cost more tax here than there, and a large Betriebsrente less.

The capital component rule (art. 54.º) excludes the part of an annuity that returns contributions already taxed — relevant for private annuities and some Direktversicherungen, not for the statutory pension.

What Germany does, and stops doing

Germany’s limited tax liability (EStG § 49 (1) Nr. 7) covers pensions paid by the Deutsche Rentenversicherung, the agricultural fund, the Versorgungswerke and German insurers to non-residents. The Finanzamt Neubrandenburg issues assessments on 84 % of the pension without the Grundfreibetrag, at the tariff from the first euro — unless the taxpayer shows that the convention assigns the income elsewhere.

The proof is a Portuguese certificate of tax residence and, in practice, the Portuguese assessment (nota de liquidação) showing the pension taxed. Once accepted, Neubrandenburg issues a nil assessment or an exemption for the following years. Pensioners can also apply to be treated as unlimited taxpayers in Germany (§ 1 (3) EStG) if 90 % of their worldwide income is German — which is common and gives the Grundfreibetrag — but with the convention pointing to Portugal, that route matters only for NHR holders.

Company pensions are paid without German withholding once the payer holds an exemption certificate (Freistellungsbescheinigung) from its Finanzamt.

Steps

Questions