The Finnish Parliament has approved the termination of the tax treaty between Finland and Portugal which prevented Finnish tax authorities from assessing pensioners who have non-habitual residence (NHR) status in Portugal. Finnish tax subcommittee chairman, Esko Kiviranta, still expects the two countries to ratify a new agreement by 1 January 2019. “In this way, we will avoid a situation where there is no tax treaty between Finland and Portugal. This is still possible if Portugal finalises the approval process and notifies Finland by 1 December 2018.”

According to Chairman Esko Kiviranta, the impact of the end of the agreement on pension revenues is expected to be between three and six million euros per year based on the 2016 data. In 2017, 500 Finnish pensioners benefitted from the zero tax rate on their retirement benefits under NHR.