The non habitual resident in Portugal fiscal regime was created for the benefit of expatriates who choose to live in the country for a long period of time.
Pensioners, entrepreneurs, as well as investors or high net worth individuals can benefit from this tax regime, based on tax residency in Portugal.
The Portugal non habitual resident tax offers a lower tax rate or a total tax exemption on the personal income derived by foreign nationals.
Our Portugal immigration specialists answer some of the most common questions about this preferential tax regime below.
If you are a foreign national and wish to receive personalized information about how you will be taxed as a non habitual resident in Portugal, our team can help you with tailored services.
When you relocate to the country based on a Portuguese nomad visa which has been recently announced, you will enjoy the benefits of the NHR regime. However, in order to qualify, you will need to show proof of sufficient monthly income (calculated compared to the current Portuguese minimum wage). Our team can give you more details about the visa for digital nomads, compared to the other visa types.
A special tax regime implemented by the Government is available for foreign nationals for a period of 10 years.
The regime for non habitual residents, or the NHR Portugal regime, is available to certain categories of foreign nationals who are relocating to the country or to Portuguese nationals who are returning to their home country after a long period of living abroad.
The individual can start benefiting from this regime starting with the year when he or she registers for tax residency in Portugal (is considered a tax resident in the country).
The regime is available to an individual who:
For the purpose of the NHR in Portugal, the following considerations are important:
Portugal also allows the possibility of partial tax residence. This means that the individual can be considered a tax resident only during a certain part of the year.
The preferential tax regime for qualifying foreign nationals living in the country is taxed at a special 20% flat rate when it is derived from high-value activities, artistic activities, and scientific or technical activities.
Examples of high-value activities that fall under the NHR Portugal regime include the following:
Our Portugal immigration team can give you more details if you work in any of these fields.
In addition to this, foreign-source income can be exempted from personal income tax when:
This means that the NHR status can also be beneficial for those who retire to Portugal and derive income from pension received from their country of origin.
Employment income can be exempt from personal income tax under this special regime, provided that it is taxed in the state from which it is sourced according to an applicable tax treaty or according to the local state rules if no treaty is in place.
Portugal has signed double taxation agreements with 78 countries and two more are awaiting their entry into force.
Foreign nationals should know that registration as a non habitual resident and the application of the preferential income tax rate is not automatic.
An individual receives the status of a non habitual resident in Portugal when:
The tax authorities have the right to request additional documents in order to approve this status and confirm one’s application for tax residency in Portugal.
One applies for NHR Portugal until March 31st the year after taking up residency in Portugal.
While the personal income tax rate can be capped at a preferential rate for a 10-year period in the case of expatriates living in the country, other taxes are also worth taking into account:
Our team also lists the following aspects concerning tax compliance for individuals:
Our team also offers services for investors who apply for a golden visa in Portugal.
The non-habitual resident regime can be considered one of the main aspects that make Portugal an attractive option for foreign nationals from a taxation standpoint.
Nonetheless, the 10-year NHR regime is not the only beneficial provision in terms of taxation for individuals:
All of the beneficial tax aspects for individuals can be further discussed with one of our immigration experts with competencies in taxation matters.
In addition to these tax advantages, Portugal can be a suitable choice in Europe due to the fact that it is part of the European Union and the Euro Zone, and it is part of the Schengen area.
English is widely spoken, making it easy for foreign nationals and investors to take up residence here.
Overall, Portugal is a country that offers a high quality of life to expatriates and a welcoming regime for foreign nationals.
It is also a city break and tourism destination, and it is well connected to the rest of Europe through numerous airports and railways.
Moving to Portugal for investment or employment purposes is subject to a set of other conditions, apart from the ones concerning taxation described herein.
Digital nomads, as well as other freelancers and self-employed individuals who are not EU/EEA citizens, will need to follow a set of steps that will allow them to remain in the country longer than permitted by their tourist or short-term business visa.
Foreign nationals who wish to make sure that they comply with the requirements for long-term stays in Portugal can reach out to our team of immigration experts at any point during their relocation process.
If you are already in the country and are looking to apply for tax residency in Portugal, our team can assist you.
For more information about residency in Portugal, the types of residence permits and their renewal, as well as other relevant aspects of living in the country as a migrant, please reach out to our team. We provide complete solutions to individuals and families who relocate to Portugal and are able to assist them throughout the process with personalized recommendations.
If you are interested in other matters, such as how and when you can apply for Portuguese citizenship after a number of years lawfully spent in the country, our team can answer your questions. Portugal is a country that allows dual citizenship and gaining this status can be to the applicant’s advantage, given the fact that once the process is complete, he or she will be able to have a Portuguese passport.
Contact us for more details about the NHR tax in Portugal, as well as other information about the tax implications of moving to the country.