Overview
- The Federal Fiscal Court’s 3 September 2025 ruling holds that pensions received by residents using Portugal’s residente não habitual status fall under the double-tax treaty’s subject-to-tax clause.
- The decision covers payments from professional pension schemes as well as statutory social insurance, rejecting claims that these should be treated differently.
- In the reported case, a retiree living in Portugal received a German tax assessment of €82,521 for 2019 after Portugal waived tax under the special status.
- German authorities, led by Finanzamt Neubrandenburg, are positioned to apply the judgment, including ordering about 25% withholding at source on pension payments to residents abroad.
- Experts say the reasoning may be applied to other countries with newcomer tax incentives, and retirees should review their exposure given Portugal’s pre‑April 2020 full exemption and later 10% regime.