Portugal: the old NHR regime closed to new arrivals, and that changes the US arithmetic.
There is a US–Portugal income tax treaty and a totalization agreement. The non-habitual resident regime closed to new entrants and was replaced by a narrower incentive, so recent arrivals generally pay more Portuguese tax than earlier ones — which means a larger foreign tax credit and, usually, a smaller US bill.
Tax snapshot — Portugal
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Sources: IRS Publication 54; IRS Publication 901; US–Portugal income tax treaty (1994); US–Portugal totalization agreement (1989); Rev. Proc. 2025-32. Checked 28 August 2026.
What that means on your return
Which regime you fall under decides your Portuguese rate, and your Portuguese rate decides your credit. Confirm your own status before planning around either regime. [TBD — verify the current incentive's scope and eligibility before relying on it.]
Portuguese funds and PPR retirement products are tax-favoured locally and frequently PFICs or reportable assets to the US. The wrapper that makes your Portuguese return simple can make your American one considerably less so.
The totalization agreement covers Portuguese social security, so a self-employed American contributing there generally escapes the 15.3% US self-employment charge with a certificate of coverage.
If you are in Portugal as a…
Questions I get about Portugal
Can I still get the NHR regime?
It closed to new entrants and a narrower incentive replaced it. Your eligibility depends on when you arrived and what you do, and the current rules should be confirmed rather than assumed — the position here is flagged as unverified deliberately.
Does Portugal tax my US pension?
The treaty allocates pension taxing rights, and which article applies depends on the type of pension — a government pension and a private one are not treated alike. It is settled by reading your own facts against the treaty, not by a general rule.
I already pay high tax in Portugal. Do I still file a US return?
Yes, every year. Citizenship-based taxation does not care what you pay locally. The foreign tax credit usually removes the US liability, but the filing obligation stands, and FBAR and FATCA reporting stand with it.
When is my return due?
15 June, under the automatic extension for filers living abroad. Form 4868 moves it to 15 October, and I file the extension free.
Do I have to file an FBAR for my Portuguese bank account?
If your foreign accounts together passed $10,000 at any point in the year, yes. You can file it free through FinCEN's own system. The non-willful penalty for not filing is $16,536.
I have not filed for several years. What now?
The Streamlined Foreign Offshore Procedures: three returns, six FBARs and Form 14653 certifying non-willfulness. Penalties are waived. Note that the IRS terminated the separate Delinquent FBAR Submission Procedures around 1 July 2026.
Filing from Portugal this year?
Twenty minutes with the Enrolled Agent who will prepare and sign it. Complete return, $599.
An IRS Enrolled Agent working only on US tax for Americans living abroad. I prepare and sign every return myself — 17 years in practice, 12 of them as an Enrolled Agent.