The Portugal–Ireland double tax treaty: pensions, dividends, gains, who taxes

Signed in Dublin on 1 June 1993, in force since 11 July 1994 and amended by a protocol in 2005, the Ireland–Portugal convention follows the OECD model with two Irish touches: a 120-day rule for permanent establishments and a three-year reach over the share gains of people who leave. For a retiree, article 18 decides.

Updated 18 September 2026Facts checked against official sources (listed at the end)

Portuguese passport on a desk with business documents

Residence and the tie-breaker (art. 4)

Irish residence is a day count (183 days in the year, or 280 over two years); Portuguese residence is 183 days in any twelve-month window or a habitual home. When both apply, the treaty decides by permanent home, then centre of vital interests, then habitual abode, then nationality, then mutual agreement. Ireland’s “ordinary residence” (three years after leaving) does not override the treaty: an ordinarily resident Irish person who is treaty-resident in Portugal is taxed in Ireland only on Irish-source income the treaty allows.

Pensions: residence state only (art. 18) — Irish public-service pensions excepted (art. 19)
15 % / 15 % / 10 % ceilings on dividends, interest, royalties
Property and property-rich shares taxed where the property is; other gains where the seller lives
Three years: Ireland may tax gains on Irish company shares of a former resident if Portugal does not tax them

Income by income

Income	Taxed in	Source ceiling
Employment (art. 15)	where the work is done; residence state only if under 183 days and paid by a non-resident employer without a PE	—
Business profits (art. 7 and protocol)	residence state, unless a permanent establishment exists — including staff present 120 days or more in twelve months	—
Dividends (art. 10)	both; source limited	15 %
Interest (art. 11)	both; source limited	15 %
Royalties (art. 12)	both; source limited	10 %
Rents and gains on property (art. 6, 13)	where the property is; unquoted shares deriving more than 50 % of their value from property count as property since the 2005 protocol	—
Gains on other shares and assets (art. 13 n.º 5)	residence state only	—
Pensions and annuities for past employment (art. 18)	residence state only	—
Government-service pensions (art. 19 n.º 2)	the paying state — unless the pensioner is resident and national of the other state	—
Other income	residence state	—

Pensions in practice

An Irish retiree resident in Portugal declares the occupational pension, the personal pension or PRSA drawdown, the ARF distributions and the State Pension in Portugal, at the progressive rates after the 4 587 € deduction. Revenue issues a PAYE exclusion order on proof of Portuguese residence so the pension is paid gross; tax deducted before the order is refunded. A civil-service, HSE, teacher’s or Garda pension stays taxable in Ireland (art. 19), is exempt in Portugal and only lifts the rate on other income — unless the pensioner holds Portuguese nationality, in which case Portugal taxes it instead.

The 2005 protocol’s three-year rule

Article 13 n.º 6 lets Ireland (or Portugal) tax gains on shares, securities or debt claims of its own companies made by an individual who was resident there at any time in the three years before the sale, held 5 % or more of a class of shares (alone or with family) or a stake worth more than 500 000 € — but only if the other state does not tax the gain. Under ordinary Portuguese residence the gain is taxed here at 28 %, so the clause does not apply; it was written for exempt regimes such as the old NHR. Irish CGT on assets held at departure is not a deemed-disposal charge, so shares sold after the move are taxed in Portugal only.

Relief (art. 23)

Both countries use the credit method: the residence state taxes the income and deducts the tax the source state was entitled to charge. Portugal credits up to the Portuguese tax on the income and up to the treaty rate (IRS Code, art. 81.º); Irish tax charged above 15 % on interest, or on a pension that the treaty leaves to Portugal, is reclaimed from Revenue rather than credited. Ireland credits Portuguese tax on Portuguese-source income and, for corporate shareholders holding 25 %, the underlying Portuguese company tax.

Using the treaty

Residence certificate

Portugal: online at Finanças. Ireland: from Revenue on request, for Portuguese-source income of an Irish resident.

Reduced withholding

Portugal: Modelo 21-RFI to the payer before payment (Portuguese dividends and interest to an Irish resident at 15 %). Ireland: the non-resident dividend declaration for exemption from Irish dividend withholding; the PAYE exclusion order for pensions.

Declare at home

Portuguese annex J with each Irish item and the Irish tax within the treaty limit; Irish Form 11 or 12 only for income Ireland may still tax.

Disputes

Mutual agreement procedure with the competent authority of the residence state; the treaty has no arbitration clause.

We obtain the residence certificates, file the Portuguese treaty forms and prepare the return with the credits computed under article 23, and we check each Irish pension against articles 18 and 19 before you move. Ask about your case.

Questions

Is my ARF or PRSA drawdown a pension under the treaty?

Yes: payments from an Approved Retirement Fund or a vested PRSA are pension income "in consideration of past employment" and, for Revenue's purposes, qualify for the PAYE exclusion order once you are treaty-resident in Portugal. Portugal taxes them at the progressive rates.

I let my Dublin apartment from Portugal. Who taxes the rent?

Ireland first (art. 6), through the non-resident landlord withholding or a collection agent and an Irish return; then Portugal at 25 % (or progressive rates), with credit for the Irish tax up to the Portuguese tax on the rent.

Does the treaty cover CAT and Portuguese stamp duty on inheritances?

No. It covers income tax, corporation tax and capital gains tax. Ireland charges CAT when the disponer or beneficiary is Irish-resident or the asset is Irish; Portugal charges 10 % stamp duty on Portuguese assets passing outside the spouse–descendant–ascendant line. Each grants only unilateral relief.

Sources and official references

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