Does Portugal tax US Social Security, 401(k)s and IRAs?

How the US-Portugal treaty treats Social Security, 401(k), IRA, Roth, government pensions, dividends and interest for Americans in Portugal now that NHR is closed, and the Social Security question.

Updated 2026-10-25 · Expat Academy · Education, not advice

With the NHR regime closed, an American retiring to Portugal in 2026 pays Portugal's normal rates on most US income. The treaty decides the credits.

Account by account

Income	Portugal	The US	In practice
401(k), IRA, private pensions	Taxes it at the scale	Taxes you as a citizen	Portugal's tax; the US credits it
Social Security	Read two ways	May tax it as the paying country	See below
US government pensions	Generally exempt	Taxes it	The US tax
Roth IRA	Not recognised	None	Portugal's tax on what it taxes
US dividends	28%	Up to 15% as source country	Mostly Portugal's
Interest, gains	28%	Taxes you as a citizen	Portugal's tax; the US credits it

Article 20(1)(b) says US Social Security "may be taxed" in the US. Many Portuguese preparers read that as leaving Portugal free to tax it as well, with a credit for the US source tax (what the US would charge a non-citizen, 25.5% of the benefit). Others leave it to the US only. A 2020 ruling from the Portuguese tax office confirmed the US's right without settling Portugal's. The answer can change your Portuguese bill by thousands of dollars a year, so get your preparer's position in writing.

The rates

Pensions: a €4,587 (about $5,134 today) deduction per person with pensions, then 12.5% rising to 44.6% from about €46,566 (about $52,121 today) and 48% above €86,634 (about $96,969 today), with a 2.5% to 5% solidarity surcharge at high incomes. Married couples can file jointly, which divides income by two before the scale.

A worked example

A single retiree in Lisbon receives $30,000 of Social Security, $28,000 from a 403(b) and IRA, $3,000 of dividends and $2,000 of interest. With Social Security taxed in Portugal, her total tax is $15,522; if only the US taxed it, $6,112. The Social Security reading is worth $9,410 a year to her.

What it means for planning

Because Portugal taxes IRA money on a steep scale and investment income at a flat rate, which account you draw from matters, and so does what you do before your arrival date. See tax planning before moving to Europe.

What the course adds

The Portugal course takes this item by item for your own income: the Portugal tax estimator shows each country's tax and credit on every line, with both readings of the Social Security question; the account comparison shows what each account costs before and after the move and which pre-move moves pay; and the lessons cover Annex J, inheritance and property taxes, and the yearly calendar.

Questions

Are 401(k) and IRA withdrawals taxed in Portugal?

Yes. Under article 20 of the treaty, private pensions are taxable only in the country of residence, so Portugal taxes them at its scale (12.5% to 48%) after a €4,587 deduction per person. The US taxes you as a citizen and credits Portugal's tax.

Does Portugal tax US Social Security?

The treaty says the US may tax it, without saying only the US. Many Portuguese preparers treat it as also taxable in Portugal, with a credit for the US source tax; others leave it to the US alone. The difference can be thousands of dollars a year.

How are US dividends and interest taxed in Portugal?

At the 28% special rate, unless you choose to add them to the scale. Portugal credits up to 15% of US tax on dividends.

Is the NHR regime still available for US pensions?

No. NHR is closed to new residents, and its successor IFICI doesn't cover pensions.

Go deeper

P4 Portuguese income tax on your US income: Portugal taxes residents on worldwide income: pensions and IRA money at a scale from 12.5% to 48%, after a specific deduction, and interest, dividends and gains at a flat 28%. The old NHR regime is closed to new retirees.
P5 The US-Portugal treaty, and the Social Security question: Portugal credits only the US tax it would let the US charge a non-citizen; the US credits the rest. On US Social Security the treaty's wording is read two ways, and the difference is often thousands of dollars a year.
P6 Each account in Portugal, and the moves to make before you go: In Portugal IRA money is taxed on a steep scale and investment income at a flat 28%, and Roth and HSA money get no special treatment. What each account costs, and what to do while only the US taxes you.

Sources

Education, not advice. This guide explains general rules as of the date above. Rules change every year; confirm your own situation with a qualified adviser in the US and in France.