Portugal NRIs · Dividend Tax
Dividend tax on Indian shares for NRIs in Portugal
Dividends from Indian companies are withheld at the non-resident rate before they reach you in Portugal — here's the treaty position and how to reclaim any excess.
India-Portugal key facts: dividend tax
| Default Section 195 rate | 20% |
| India-Portugal DTAA treaty rate | 15% |
| Your saving via the treaty | 5% |
| Treaty article / basis | Article 10: 15% for an individual (10% only for a company holding at least 25% for two years) |
| Your TRC issuing authority | Autoridade Tributaria e Aduaneira (AT) |
Rates reflect India's domestic Section 195 withholding and the India-Portugal treaty. Surcharge and cess apply on top where relevant.
How it works on the India side
Since the 2020 shift back to classical dividend taxation, dividends from Indian companies are taxable in the shareholder's hands and the company deducts TDS before paying. For a non-resident the default is Section 195 at 20% (plus surcharge and cess). Whether a treaty rate is available depends on the specific treaty — for many countries the lower dividend rate is written only for companies holding a large stake in the Indian payer, which means individual portfolio investors stay at the domestic rate.
Where a lower individual rate does apply, you claim it with Form 10F and a Tax Residency Certificate lodged with the company or broker, and any quarter withheld at the higher rate before your paperwork was on file is reclaimed through your Indian return. Where no lower rate applies, the dividend still goes on your return, and the real relief sits on your home-country side as a foreign tax credit for the Indian tax already paid.
What changes because you live in Portugal
Portuguese residents report this Indian income on the Modelo 3 IRS return with a foreign tax credit for the Indian tax paid. With the old Non-Habitual Resident regime now closed to new arrivals and replaced by the narrower IFICI incentive, most recent movers no longer get the ten-year holiday, so the Indian income is fully taxable in Portugal with only the credit to soften it. On the plus side, other income not covered by a specific treaty article is taxable only in Portugal, so India cannot tax it.
Frequently asked questions
Common questions from Portuguese NRIs
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Dividend Tax sorted, by an Indian CA who works with Portuguese NRIs
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