So I am heading down the path of a GV for Portugal. If I obtain citizenship, what are the long term impact of taxes to my American IRA and 401Ks. Will Inhave to pay both or just become a non habitual tax resident?
As long as you remain a US citizen you are going to be required to file a tax return every year to pay tax to the US Government on your worldwide income. The good news is if you are working overseas you get a Foreign Earned Income Exclusion of $107,600 that you won’t have to pay tax on. You are best to keep your IRA’s and 401K’s but you may need to roll them over to someone that will manage them for a non resident. There would be no tax issues in Portugal until you use them to buy an annuity and start taking an income from them. As long as your income remains below the Foreign Earned Income Exclusion the only tax you will need to pay is the Non Habitual Resident tax of 20%.
Thank you. This is very helpful. I assume that since US capital gains taxes are higher than 20% there would not be any Portuguese tax.