Does Portugal tax my pension first under the new resident regime?
It depends which version of the regime you registered under, not on the version being described today. Special regimes for new residents in Portugal have changed more than once, and the terms a person entered under govern their position afterwards. So two clients drawing the same pension can face a different first claim because they registered in different years. Start with your own registration record, because it is the only reliable statement of your Portuguese position. Once that is settled, the order of taxation and the direction of the relief claim follow from it.
I read that Portugal exempts foreign income, is that still true?
The question cannot be answered from a general description of the regime, because the regime has been changed more than once and what applies to you is what you registered for. Published summaries describe the current terms, which may be neither the terms you entered under nor the terms in force when the summary was written. The practical step is to retrieve the registration and read your status off it. Anyone advising you on the order of taxation without that document is guessing, and the guess usually surfaces as an unexpected residual charge.
If Portugal exempts my income, do I get a US credit?
No. Relief in the other country is given for tax actually paid, so an exemption on the Portuguese side leaves nothing to relieve and the full charge falls where the residual claim sits. People are often surprised by this: the arrangement that reduced one bill to nothing increased the other. Meanwhile the US obligation continues regardless of the Portuguese treatment. The sensible order of work is to establish the Portuguese position first, then compute what the other country will actually charge, and plan for that figure rather than discovering it at filing.
How do I prove which Portuguese regime I am under?
From your own registration with the Portuguese authorities, including the date it took effect and the terms recorded at the time. That document, rather than a current published summary, governs your position, and it is what any adviser on the other side of the corridor should be working from. Keep it with your tax papers, because the question comes up every year and the answer does not change with later amendments to the regime. If the registration cannot be located, obtaining a copy is the first piece of work, before any return is prepared.
Who taxes my US dividends first if I live in Portugal?
Income of that kind normally carries a charge in the country it arises in, applied when it is paid, and then comes into the return of the country you live in with relief for what was already taken. So the first claim usually sits at source and the residual sits at residence. Your Portuguese position can change the size of the second charge, and under some registrations its character as well, which is why the registration is checked before the relief is computed. The obligation in the other country continues either way.
I became Portuguese resident mid-year, which country taxes that year?
Both, for different parts of it. Portugal reaches the period its residence rules cover, while the obligation in the other country runs across the whole year. The order of taxation therefore changes partway through, and items that straddle the change have to be allocated by date rather than averaged over the year. A regime registration taking effect on a particular day adds a second line inside the same year. Fix all the dates first, meaning arrival, registration and year end, and the ordering of each item follows without argument.
Do I have to file in both countries?
Frequently yes, and the two filings do different jobs. The country where the income arises taxes it at source; the country where you are resident taxes your worldwide income and then gives credit for the tax already paid. Filing only one side is what leaves relief unclaimed — the credit has to be asked for on a return. We prepare both sides so the numbers agree. See dual filing.
I have not filed for several years while living abroad — what are my options?
Both countries have routes back, and using one before they contact you is what preserves the relief. On the US side there are procedures aimed at taxpayers whose failure was not wilful, including one designed for people living outside the country, and separate procedures for late account reports and information returns alone. Canada has its voluntary disclosures programme and taxpayer relief for penalties and interest. Filing quietly and hoping is the one approach with no protection attached to it. See catch-up filing.
