Moving to Madeira from Germany in 2025: Immigration Registration and Tax Liabilities

You are not alone if you consider moving to Madeira from Germany in 2025. This stunning Portuguese island offers an excellent climate, a high quality of life, and an attractive cost of living. However, before moving to Madeira from Germany, it is crucial that one fully understands the immigration process and their tax obligations, particularly regarding personal income tax as an expat on the archipelago.

Immigration Registration in Madeira for German Citizens

German citizens benefit from the European Union’s freedom of movement, making the relocation process to the Autonomous Region straightforward and not at all complex from an immigration standpoint. However, one must still follow the registration requirements to comply with Portuguese Immigration Law.

1. Short-Term Stay (Up to 90 Days)
2. German citizens can stay in Madeira for up to 90 days without formal registration. You must carry a valid passport or national ID card during your stay.
3. Residency Registration (More than 90 Days)
4. If you plan to stay more than 90 days, you must register as a resident. The process involves:
   • Applying for a Certificado de Registo de Cidadão da União Europeia (CRUE) (EU Citizen Registration Certificate) at the local city hall (Câmara Municipal).
   • Providing proof of residence, such as a rental contract or property deed.
   • Demonstrating sufficient financial means (such as proof of income, pension, or employment in Portugal).
   • Showing proof of valid health insurance or enrollment in the Portuguese healthcare system.
5. Long-Term Residency
6. After five years of continuous residence, you can apply for a permanent residence certificate, which offers excellent stability and rights similar to those of Portuguese nationals.

Tax Liabilities for German Expats in Madeira

Once you become a resident of Madeira, you must comply with Portuguese tax regulations. Here’s what you need to know about personal income tax:

1. Tax Residency in Portugal
2. You are considered a tax resident in Portugal if you:
   • Spend more than 183 days in Portugal within 12 months.
   • Have a permanent residence in Portugal on December 31 of any given year.
3. Personal Income Tax (IRS) Rates in Portugal
4. As a tax resident, your worldwide income is subject to Portuguese taxation under the Imposto sobre o Rendimento das Pessoas Singulares (IRS) system, with progressive taxes reaching up to 48%. Notwithstanding this, taxes paid abroad (on foreign income) may be used against taxes due in Portugal.
5. German Pensions and Other Foreign Income
6. If you receive a German pension or other income from Germany while living in Madeira, the Portugal-Germany Double Taxation Agreement (DTA) helps prevent double taxation. Generally:
   • Public pensions (e.g., those from government employment) are taxed in Germany.
   • Private and occupational pensions are typically taxed in Portugal.
   • Rental income from German properties remains taxable in Germany but must be declared in Portugal.
   • Any other income earned in Germany may also be subject to taxation in both countries, with a tax credit available in Portugal to avoid double taxation.
7. Social Security Contributions
8. If you work in Portugal, you must contribute to the Portuguese social security system (Segurança Social). Contributions are usually 11% for employees and 23.75% for employers. Self-employed individuals contribute 21.4% of their income.
9. Filing Taxes in Portugal
10. Residents must file an annual tax return (Declaração de IRS), usually by June 30 of the following year. This can be done online through the Portuguese tax authority’s portal; however, the Portuguese tax web portal’s only working language is Portuguese, and expats are always advised to engage a tax consultant instead of doing things on their own – to avoid unlawful personal income reporting.

Conclusion

Before moving to Madeira from Germany in 2025, it is essential to comply with Portuguese immigration and tax laws. Understanding the residency registration process and personal income tax liabilities can ensure a smooth transition to life in the Autonomous Region. German expats should seek professional assistance from resident experts versed in relocation to help them navigate the complexities of tax compliance and residency procedures.

MCS

The founding of Madeira Corporate Services dates back to 1995. MCS started as a corporate service provider in the Madeira International Business Center and rapidly became a leading management company… Read more