Invest in Portugal

Non-habitual Resident

The Fiscal Regime for Non-habitual Residents is targeted to attract professionals of high cultural and economic worth with the objective to increase the country’s international competitiveness. First implemented in 2009 it offers substantial tax savings on Personal Income Tax (IRS) for those who qualify. Overall, the scheme has been highly successful and as a result, there are now over 10,000 non-habitual tax regime residents in Portugal.
The scheme includes several possible tax benefits and is also accessible for beneficiaries of pensions obtained abroad.
However, among other elements, one very important feature lies in its relationship with Double-Taxation Agreements (DTAs) with other countries. Portugal currently has DTAs with 79 countries and the OECD model tax convention may be used in the absence of a DTA.

We highly recommend that the safest way to apply for NHR status in Portugal is with the help of a specialist accountant. This way you can ensure that you have a full understanding of Portuguese tax law to find the best solution for your needs.

Benefits

  • Special tax treatment for 10 years
  • Possibility of enjoying a tax exemption on almost all foreign source income
  • 20% flat rate for certain Portuguese source incomes related to specific professions as well as income from self-employment (Normal Portuguese income tax rates are up to 48%)
  • A tax exemption for gifts or inheritance to direct family members
  • No wealth tax
  • Free remittance of funds to Portugal
  • No minimum stay requirement

Requirements

In order to qualify for the NHR regime, applicants must fulfil the following requirements:

  • Have the right to reside in Portugal either through being an EU/EEA/Swiss citizen, or through schemes such as the Golden Visa program
  • Not have been a Portuguese tax resident during the five years prior to taking up residence in Portugal

Application for the NHR

There are various distinct steps to requesting the non-habitual resident status. First you will need to secure your residency in Portugal including obtaining the Portuguese Tax Number (NIF). Then you will need to register as a tax resident and finally apply for the NHR status.

To maintain a residency status in Portugal, the individual must have a place to reside in in the country on the 31st of December of the same year.  This residence must be available in such a way that it demonstrates that there is a real intention to keep and occupy it as an habitual home.

The application for registration as a non-habitual resident must be made, electronically, at the Tax Office portal. Such an application must be made on or before March 31st of the year following becoming a tax resident.

NHR changes in 2020

Portugal’s annual State Budget Law for 2020 introduced a change to the non-habitual resident regime. This affects the taxation on foreign-source pension income for non-habitual residents who will be taxed at a flat rate of 10% going forward. These changes will not affect those who are already non-habitual residents and benefit from the current IRS exemption (0%).

DISCLAIMER: the information provided on Portugal’s Golden Visa and non-habitual resident tax regime is not intended as a substitute for legal advice. Whilst we take care to ensure that all our information is correct and up-to-date, it is important to always rely on professional advice or the relevant legislation when considering your particular circumstances.

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