Non-Habitual Residents



The Tax System for Non-Habitual Residents

The Non-Habitual Resident tax regime (NHR) applies to foreigners who wish to reside in Portugal or to Portuguese who reside in another country and want to return to Portugal.

The tax regime (created by Law no. 249/2009 in Sep. 23 and then reviewed in 2013) is another mechanism to attract foreign
investment. The regime offers tax incentives to skilled professionals residing abroad, who have activities of high added value (intellectual,
industrial or know-how) and 0% tax for retirees pensions.
 

Requirements to benefit  from the NHR tax regime

To become eligible for tax incentives under this regime, the
individuals can't be tax residents in Portugal in the previous 5 years.

Taxpayers in these circumstances earn:

  • Fiscal incentives for a period of 10 consecutive years. After that term, taxes will be filed according to the general rules of the IRS Code.

  • The residence in Portuguese territory for tax purposes, in any year, can be obtained in different ways:

  1. Stay in Portuguese territory for more than 183 days, followed or interpolated;
  2. In case of staying less than 183 days, on December 31st of the fiscal year, applicants must own, maintain or occupy a house as habitual residence;
  3. If on December 31st, are part of a crew of ships or aircraft service entities with residence, head office or effective management in Portugal;
  4. If one of the elements of the household is considered a resident in Portugal for tax purposes on December 31st of the year related to the income return.

The applicant must file a request with supporting documentation to the Portuguese Tax Authorities, at the time of registering as a tax resident in Portugal or by March 31st of the following year after becoming resident in Portugal.


   


Benefits

The NHR is indeed one of the most competitive regimes

of its kind in Europe, particularly due to:

  • Tax exemptions on passive income, such as pensions, obtained in another country
  • Tax rate of 20% (flat rate) from high-value-added activities performed in Portugal
  • Tax exemptions from double taxation like in other European jurisdictions
  • Tax exemption from wealth, inheritance or gift for spouses and descendants

Duration of the special tax regime

The NHR status applies for a consecutive 10-year period.

If the period is interrupted for one or more years, it's still possible for the individual to benefit from the regime for the remaining period, if the requirements for being a tax resident in Portugal are met.

   

Gate to Portugal Investments offers services
to help you find your property in Portugal, and to support all your needs for the Non-Habitual Resident status.