Banking, money and taxes in Portugal

Expats moving to Portugal will find that the country has a modern and efficient banking system that makes it easy to manage one's finances.

Banks in Portugal offer a wide range of accounts and financial services including current and savings accounts, joint accounts and business accounts. Online banking is a standard feature of bank accounts in Portugal.

Money in Portugal

The Euro (EUR) is Portugal's official currency. One euro is divided into 100 cents.

• Notes: EUR 5, EUR 10, EUR 20, EUR 50, EUR 100, EUR 200 and EUR 500

• Coins: EUR 1, EUR 2 and 1 cent, 2 cents, 5 cents, 20 cents and 50 cents

Banking in Portugal

Portuguese banks are part of a national grouping of banks called Multibanco. This makes accounts easily accessible, and account holders may use a Multibanco debit card in ATMs across the country and for buying most goods.

Opening a bank account

Opening a bank account in Portugal is fairly straightforward. Expats will need to visit a bank branch in Portugal with certain documents, including proof of identity and proof of address. Documents may vary between banks, so expats should check with their chosen bank.

Credit cards and ATMs

Credit cards and debit cards are widely accepted throughout Portugal. Transaction charges do apply for those using international cards in Portugal, though.

ATMs can be easily found in most town centres and urban areas. ATMs in Portugal will accept major foreign cards. They also tend to provide better exchange rates than those offered by bureaux de change and are therefore a convenient way to access money in Portugal, especially for those without a Portuguese bank account.

The Multibanco system in Portugal is lauded for allowing its users a wide variety of conveniences. In addition to normal withdrawal and transfer services, at a Multibanco ATM expats can:

• Pay certain utility bills
• Load talk time onto mobile phones
• Pay income tax and value-added tax
• Purchase concert tickets
• Pay motor tolls

Taxes in Portugal

In Portugal, residents and non-residents are taxed differently. To be considered a resident for tax purposes, a person must reside in the country for 183 days of the year or have a permanent home in Portugal. If someone is considered a resident, they are liable to be taxed on their worldwide income.

For tax residents, tax is charged according to a sliding scale based on the individual's global income. Non-residents are taxed only on income derived from within Portugal, usually at a flat rate.

Expats may be concerned about being simultaneously taxed in Portugal and their home country, but in many cases, treaties exist to prevent double taxation. Often, becoming a resident of Portugal can exempt expats from higher overseas taxes. To find the most advantageous tax plan, it's a good idea to consult an international tax planner.