Foreign brokers and IRS: do you have to declare your gains?

Do I have to declare investments held with a foreign broker?

Yes. What determines the duty to declare is not the broker's country, but your tax residence. If you are a Portuguese tax resident, you are subject to IRS on your worldwide income (Art. 15 of the IRS Code)¹, that is, on everything you earn, here or abroad.

So gains and dividends earned on platforms such as Revolut, Trade Republic, Degiro or Interactive Brokers pay IRS in Portugal whatever country the platform is based in and regardless of the amount. Using a broker based in another country neither exempts you from declaring nor creates a different tax regime: the taxation is the same as with a Portuguese broker, only the way you declare it changes.

A foreign broker does not declare for you

This is the practical difference that catches many people out. A foreign broker does not withhold Portuguese IRS on your gains and does not fill in your return. It may give you an annual statement of your transactions, but transcribing it onto the IRS return, converting it to euros and choosing the right annex are your responsibility.

From 2026, foreign platforms start reporting automatically the transactions of Portuguese residents to the tax authority (the so-called DAC8 rules). This is a change in transparency, not in the rates: the tax authority gets more information, but the duty to declare correctly is still yours.

Where to declare it: Anexo J

Income earned outside Portugal is not declared in Anexo G (which is for Portuguese-source gains), but in Anexo J (foreign-source income). Within Anexo J, each kind of income has its place:

• Capital gains on shares, ETFs and funds go in the securities-disposal section.
• Dividends and interest go in the capital-income section.

In either case you always state the country of origin of the income and the tax withheld abroad, which is decisive for the double-taxation credit (below). The logic for working out the gain is exactly the same as for the domestic market (the one you see in the capital-gains calculator); only the annex changes. To review where and how each case is declared, see the guide on how to report capital gains on IRS.

How to convert amounts to euros: the exchange rate

When you invest in dollars, pounds or another currency, the amounts must be converted to euros before they go on the return. The rule is to convert each amount at the exchange rate on the date of the transaction:

• the purchase, at the exchange rate on the day you bought;
• the sale, at the exchange rate on the day you sold;
• the dividend, at the exchange rate on the day it was paid.

This means the currency movement feeds into the result: if the euro fell against the dollar between the purchase and the sale, the gain in euros is larger than the gain in dollars (and vice versa). It is not a separate tax: it is simply how everything is expressed in the currency of the return.

Foreign dividends: withholding at source and the tax credit

Dividends from foreign shares usually suffer a withholding at source in the country of origin. For US shares, an investor who files the W-8BEN form (which proves Portuguese tax residence) suffers a 15% withholding, instead of the 30% applied by default.

That tax paid abroad is not lost. In Portugal, the foreign-tax credit for international double taxation (Art. 81 of the IRS Code)² offsets the foreign tax against the IRS due here, preventing the same income from being taxed twice. There is, however, a limit: the credit is never greater than the tax Portugal would charge on that income. If the withholding abroad is larger than the Portuguese tax, the difference is not refunded by the tax authority. You would have to reclaim it from the country of origin under the treaty. To understand the mechanics of dividend taxation and the choice between the 28% rate and aggregation, see the article on how dividends are taxed.

The rate is the same: 28% or aggregation

Investing through a foreign broker does not change the rate. Capital gains on shares, ETFs and funds and dividends pay, by default, the 28% autonomous/final rate (Art. 72 of the IRS Code)³, just as in the domestic market. You can opt for aggregation and pay the progressive IRS rates, which only pays off if your marginal rate is below 28%, the same criterion explained in how IRS is calculated.

Worked example

Suppose you received €100 (already converted to euros) of dividends from US shares, with the W-8BEN form filed.

• The United States withholds 15% at source: €15. You receive €85 in the broker account.
• In Portugal, you declare the gross €100 in Anexo J. At the 28% rate, the IRS would be €28.
• The double-taxation credit offsets the €15 already paid in the US: you pay in Portugal 28 − 15 = €13.
• In total you paid €15 + €13 = €28, exactly the Portuguese 28%, with no double taxation.

For capital gains, the reasoning is the same as for the domestic market: you can estimate the tax on the gain (already in euros) with the capital-gains calculator and then transcribe the figure onto Anexo J.

Key takeaway

As a Portuguese tax resident, gains and dividends from a foreign broker pay IRS in Portugal and are declared in Anexo J, converted to euros at each transaction's exchange rate. The broker does not do your IRS for you. The rate is the same as the domestic market (28%, with the aggregation option) and the tax paid abroad is offset by the double-taxation credit. Work out your figures with the capital-gains calculator and, if in doubt when filing, check with the tax authority or an accountant.