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Portugal–USA Double Taxation Treaty: 2022 Developments and Their Significance
The 2022 publication clarified interpretive notes and administrative guidance on the Portugal–USA Double Taxation Treaty, confirming political momentum toward modernising the 1994 agreement.
On 18 November 2022, the Diário da República published the Portuguese ratification documents of updates concerning the Portugal–United States Double Taxation Treaty (DTT). While the treaty itself dates back to 1994, the 2022 publication clarified interpretive notes, administrative guidance, and the status of negotiations relating to a long-awaited modernisation of the agreement.
Although the full renegotiation is still pending, the 2022 developments reassured taxpayers that both governments remain committed to updating provisions on pension taxation, withholding tax reductions, and treatment of remote-work income. For many American citizens living in Portugal, the outdated treaty has often resulted in double-taxation complexities.
The 2022 publication does not itself replace the existing treaty, but it confirms political momentum toward a new agreement aligned with OECD and modern digital economy standards.
For US citizens in Portugal—who remain subject to US worldwide taxation—the treaty remains crucial for determining creditability of Portuguese taxes and avoiding double taxation. The 2022 update highlights the need for careful cross-border tax planning while awaiting the long-overdue renegotiation.
Official source: Diário da República, ratification documents relating to the Portugal–USA DTT, 18 November 2022 (https://dre.pt)