On August 25, the French and Portuguese Finance Ministers, changed the tax conventions signed between the two countries back in 1971. According to OCDE principles, these modifications will translate into important changes.
First of all, it will prevent double taxation, solving specific problems of French citizens living in Portugal and receiving revenues from French public funds who, since 2001, payed taxes for these revenues in France as well as in Portugal.
The moment these modifications become effective, income from French public funds will be taxed in France only. These changes will be applied on a retroactive basis as of January 2013.
These changes will benefit a large number of French expats who live in Portugal. An acceleration on expatriations to Portugal are also anticipated as a consequence of this reform. Expatriation to Portugal is already promoted by the Non Habitual Residence (NHR) regime which allows expats a 10-year tax exemption, under certain conditions. More information on the NHR at Living in Portugal
The modifications to the tax convention are expected to enter into force as of January 2017, after its ratification process at the French and Portuguese Parliaments.