Portugal is often described as a taxation paradise for pensioners and probably not unfairly as it offers tax breaks to pensioners from other countries, as long as they choose to live in Portugal. However, this policy is provoking intense reactions from Finland, Sweden and France.
"A French citizen, or a Finn, of course does not positively view the implementation of a more generous tax regime in Portugal. They are not interested in attracting investments or the rate of economic growth in our country. They are interested in their own country and how to improve life for their citizens in the poorest areas of their country. I think this is the main issue of friction," one tax adviser said.
"This favourable tax regime doesn't just face criticism from other countries in the European Union, but also from many Portuguese who feel that it is unfair for them to pay and not for some others," said Euronews correspondent in Porto Filipa Soares.
"We believe that what is happening is not fair. Foreign pensioners who move to Portugal receive more benefits than us. This is something we have told our government, we have repeatedly protested. But there is also another issue. The majority of foreign pensioners who live in our country have very good pensions compared to ours as we get a lot less money. So a very unfair situation has developed," said the president of Portugal's National Association of Pensioners.
According to authorities, about 10,000 foreign pensioners benefit from the favourable tax regime. Finland has complained about the bilateral agreement with Portugal, because it wants to tax the pensioners who have moved to the taxation paradise of the European south.