Portugal vs. Spain - Taxes, Residency Benefits & Choosing the Right Country (2026 Guide)

About the authors
This article was co-authored by Maria Grima, Tax Lawyer specialising in Spanish taxation and international mobility, and Daniel Cardoso, Certified Public Accountant (CPA) specialising in Portuguese taxation. Both work closely with moviinn® clients to design compliant, cross-border tax strategies for individuals and families relocating to Spain and Portugal, ensuring that immigration decisions are aligned with long-term tax efficiency and regulatory requirements.

Tax is personal. Two families with the same income can face different outcomes due to timing, treaties, and asset mix. Use this guide to orient yourself, then let moviinn® model your specific position.

1) Becoming tax resident: the threshold that triggers everything

Portugal (high-level):

- Tax residency typically attaches when you’re in Portugal 183+ days in a 12-month period, or when you establish a habitual residence, practically, most movers crossing mid-year will plan carefully around the start of Portuguese taxation.

- Arriving in H1 may mean worldwide income is reportable in Portugal for that year;

- Arriving in H2 can, in some cases, limit the portion of income reportable in Portugal for that year, depending on residency date, income sources, and treaty positioning, but filing obligations may still apply, it’s crucial to plan it.

Spain (high-level):

- You’re generally resident if you’re in Spain more than 183 days in a calendar year, or if your centre of vital and economic interests is in Spain (e.g., family, main business).

- Days of presence in Spain:  Under Article 9.1.a) of the Spanish IRPF Law, days of presence in Spain include 'sporadic absences' unless the taxpayer can prove tax residency in another country. This rule is especially critical for individuals tracking their stay against the 183-day threshold.

- Per Article 9.1.b), a legal presumption of Spanish tax residence exists if a taxpayer’s non-legally separated spouse and dependent minor children reside in Spain, unless proven otherwise.

moviinn® aligns immigration timing with tax status so your first filing year is clean and expected.

2) Portugal taxes: rates, regimes, and reliefs you can actually use

Rates overview:

- Progressive personal income tax with bands from ~14% to 48% (latest schedules vary by year).

- Capital gains/interest/dividends often at flat ~28%, with treaty interactions and exemptions to consider.

New IFICI (Incentivo Fiscal à Investigação Científica e Inovação) regime (post-NHR):

- Portugal replaced the classic NHR with a much narrower incentive (IFICI), focused on R&D, innovation, and certified high-value activities. Eligibility is strictly tied to the nature of the work and the employer/entity involved.

- Key idea: eligibility typically hinges on working in/for qualifying Portuguese entities (e.g., startups or defined sectors). Benefits can be meaningful but eligibility is narrower than the old NHR.

- Strategy: Some movers re-shape employment (e.g., shift to a PT entity or secure qualifying status) to fit the new rules.

Freelancer incentives:

- In practice, new independent workers can benefit from reduced taxable base in early years and social security relief (e.g., exemption in year one, partial reductions in year two).

- Combine with the new regime where applicable for a double-boost.

Youth relief:

- Portugal offers youth tax relief for eligible individuals under 35, subject to income caps, duration limits, and qualifying employment criteria, creating planning opportunities for young professionals.

Wealth & property:

- No general wealth tax; however, there’s an Additional IMI (AIMI), a property-value-based annual levy for higher-valued real estate holdings (thresholds apply; ~0.7% - 1.5%). Thresholds and rates depend on ownership structure and marital status.

- Standard IMI (municipal property tax) applies by municipality.

- Real estate capital gains have specific carry-over and reinvestment rules; timing matters.

Treaty network:

- Portugal holds double taxation agreements with many countries (including the US, UK, Canada). Proper application prevents double taxation and guides where certain categories (pension, dividends, etc.) are taxed.

3) Spain taxes: ordinary vs. Beckham Law, wealth tax, and the property nuances

Ordinary regime:

- Two “bases”: general (employment, business, rents) with progressive rates (region-dependent, top rates can approach ~50%); and savings base (dividends, interest, gains) typically 19%–30%.

- DTAs (double tax treaties) with the US, UK, Canada coordinate cross-border taxation and credits.

Beckham Law regime (special expat regime):

- For workers moving to Spain for employment (or certain directors of Spanish companies; extended in 2023 to allow remote employees under strict conditions).

- Main benefits:

a) 24% flat rate on employment income derived from worldwide sources (Spanish and foreign) up to €600,000 annually (47% on the amount exceeding that threshold).

b) Foreign private income is excluded from taxation under the Beckham law Regime.

Eligibility highlights:

- Not a tax resident in Spain in the last 5 years.

- You move because of a job in Spain (or remote employment under the expanded rules).

- No Permanente Establishment (PE) risk for a foreign entity.

- When working remotely for a foreign company, you must ensure that your presence does not create a PE risk for your employer, that the company’s management remains outside Spain, and that your ownership stake does not exceed 25% (particularly if it is an asset-holding company), as this can undermine the necessary employer-employee subordination.

- The application for the special tax regime must be filed within a maximum, non-extendable period of six months from the date of registration with the Spanish Social Security system (or the effective start date of a foreign coverage certificate).

- Family add-on: From 2023, qualifying family members may access linked benefits (certain requirements must be met).

Wealth tax in Spain (and the “Solidarity Tax” overlay):

- Spain levies an annual wealth tax on net assets. While ordinary residents are taxed on their worldwide holdings, those under the Beckham Law are only liable for taxes on assets located in Spain.

- Wealth Tax allowances vary by autonomous region. Some (e.g. Madrid, Andalusia) apply 100% relief, while others (e.g., Catalonia, Valencia) apply lower exemptions or none.

- Spain also introduced a Temporary Solidarity Tax targeting higher net-worth individuals nationwide, interacting with regional reliefs.

Property nuances:

- Standard acquisition taxes (ITP/IVA, AJD) vary by region and property type (new vs. resale).

- The Standard Spanish Imputed Income Rule: Spain levies an imputed income tax (renta imputada de inmuebles urbanos) exclusively on properties that meet two criteria simultaneously:

1. They are not rented out and generating actual rental income.
2. They are not your primary, habitual residence (vivienda habitual).
The taxable amount is calculated as a percentage (1.1% or 2%) of the property's official cadastral value and must be reported annually in the personal income tax return (IRPF).

4) Choosing a tax home: practical trade-offs

Portugal advantages (typical profiles):

- Simpler right to work across visa categories; easier for couples where one spouse may work unexpectedly.

- No general wealth tax, though high-value property levy (AIMI) exists.

- Innovation-focused regime can be powerful if you anchor work in a Portuguese qualifying entity.

- Golden Visa minimal stay (average of 7 days/year) creates unmatched flexibility for globally mobile families while maintaining an EU base. Golden Visa allows minimal physical presence for immigration purposes, but tax residency is assessed independently.

Spain advantages (typical profiles):

- Beckham Law can drastically shrink your Spanish tax base if most of your capital income is foreign-sourced and your employment qualifies.

- For non-workers with strong pensions and a love for Spain (e.g., Non-Lucrative), budgeting private health and wealth tax planning is key.

- Regional planning (Madrid/Andalusia vs. Catalonia/Valencia) can materially change outcomes for higher-net-worth families.

5) US, UK, Canada examples: how the math and mechanics shift

US example: Senior software employee deciding Lisbon vs. Valencia

- Portugal path: D8 with salary ≥ €3,480/month. Standard progressive rates on employment; potential access to innovation-aligned regime if switching to a PT entity later. No wealth tax (AIMI only if buying high-value real estate). D8 alone does not grant IFICI/NHR-style benefits.

- Spain path: Digital Nomad + Beckham (if structured as employment and PE risk is mitigated). Spanish tax is then largely 24% on worldwide income, while US-sourced passive income stays out (with US filings and foreign tax credits in play). No wealth tax is paid on foreign assets under the Beckham Law regime. 

- Bottom line: If employment fits Beckham cleanly, Spain may be lighter on global capital income; otherwise Portugal may be simpler and predictable with no net-worth tax.

UK example: Semi-retired professional with a dividend portfolio

- Portugal: D7 accessible. Dividends typically ~28% (treaty nuances can reduce), but aggregation option exists. No wealth tax; AIMI only if PT real estate is high value.

- Spain: Non-Lucrative viable; but ordinary regime means savings base 19%–30% applies; plus wealth tax on worldwide net assets unless you pick regions with large reliefs (or structure under Beckham, which may not fit a retiree).

- Bottom line: If not working, Portugal often yields a cleaner result for asset-heavy retirees.

Canada example — Entrepreneur with global holdings, minimal EU presence time

- Portugal: Golden Visa shines: maintain EU residence with 7 days/year, keep core operations in Canada, and plan asset recognition for later citizenship. CFC rules and effective management may still apply depending on structure.

- Spain: Without Golden Visa, you’d choose DN or Non-Lucrative; wealth tax planning gets central.

- Bottom line: For minimal-presence EU residence, Portugal Golden Visa is unmatched.

6) Real estate and lifestyle tax planning

Portugal

- If buying a family home, model IMI, potential AIMI, and capital gains rules early.

- Rental income from non-resident properties: treaty tells us where tax lives; we prevent double tax and reconcile bases/credits.

- If you plan to found a startup, placing it in Portugal may unlock regime benefits and local incentives.

Spain

- Decide region with your advisor first if net worth is significant. Wealth tax thresholds and reliefs differ materially.

- If you’ll keep multiple holiday homes unused, factor Spain’s presumed income into annual returns.

- If you can legitimately qualify for Beckham, preserve that status (employment relationship, management limits, no PE risk).


7) Compliance timeline: avoid year-one surprises

Portugal

- Immigration approvals → residence permit timeline → tax registration → first filing season.

- Arriving later in the year (H2) can reduce first-year exposure, but filing and reporting obligations still depend on residency status and income sources.

Spain

- If using Beckham, file the application within 6 months of Spanish social security registration (or the coverage certificate start).

- Understand regional returns (wealth tax) and national returns (personal income tax) to calendar everything properly.


8) FAQs moviinn® hears every week

Q: Can I “test live” in both countries across a year?
A: Yes, but day count + ties can trigger tax residency in one even if you don’t think you crossed 183 days. We structure your visas, housing, and registrations to match the tax plan.

Q: I’m employed—should I re-paper to a Spanish or Portuguese entity?
A: Sometimes yes. In Portugal, it can unlock the innovation-focused regime. In Spain, a Spanish employment can cement Beckham eligibility—provided you meet all conditions and avoid PE risks.

Q: Do I pay wealth tax in Portugal?
A: Portugal has no general wealth tax. It does have AIMI—a property-value levy that hits higher real-estate holdings.

Q: Do I pay wealth tax in Spain?
A: Often yes (ordinary residents), but the scope and allowance vary by region. Under Beckham, it’s typically Spanish assets only.

Q: How do the US/UK/Canada treaties change things?
A: Treaties allocate taxing rights and enable credits. We model the treaty article by income type (dividends, pensions, gains) and ensure the country with the primary right taxes first.

9) Putting it together: decision matrix

- You want to work remotely with minimal formalities → Portugal D8 is typically cleaner.

- You’re an employee with large foreign investments → Spain Beckham (if eligible) can be very tax-efficient.

- You won’t work and want simplicity → Portugal D7 is often easier; Spain Non-Lucrative works with planning (private insurance, wealth tax).

- You’ll travel most of the year → Portugal Golden Visa (Spain has none).


10) How moviinn® optimizes your move and your taxes

1. Diagnostic & modeling (US/UK/CA income sources, equity, pensions, trusts).

2. Visa strategy that supports the tax plan (not the other way around).

3. Entity and payroll structuring for eligibility (Portugal innovation regime (IFICI); Spain Beckham Law Regime).

4. Regional selection in Spain (Madrid/Andalusia vs. Catalonia/Valencia) based on wealth/treaty profile.

5. Filing calendar for both countries, with treaty coordination.

6. On-the-ground settling (banks, tax IDs, schools, utilities) so compliance is never an afterthought.

Book a complimentary session with moviinn® to compare Portugal and Spain for your exact tax picture, and leave with a clear, step-by-step plan.