The Non-habitual resident (NHR) program was created by the Portuguese government in 2009 to attract and support foreigners and investors to Portugal by implementing a special tax regime to new residents that offers reduced personal income tax (PIT) rates and exemptions on some taxes on income from skilled work, liabilities, and pensions.
The special NHR status can be enjoyed for a maximum of 10 years, offering great opportunity by its special tax treatment to non-residents who would like to establish permanent or temporary residence in Portugal.
Grants eligible applicants a flat 20% tax rate on Portugal sourced income
The holders of a NHR are exempt from paying taxes on global income
Foreign investors may acquire a Portugal Golden Visa and optimise their taxes by applying for a NHR status as well
NHR can also lead to exemption from Portuguese taxation on income sourced from outside Portugal, subject to certain criteria including dual taxation agreements with other countries.
Exemption of tax on inheritance or gifts to family members
Exemption of wealth tax
Exemption of tax on almost all foreign sources of income
Special tax treatment on income tax during 10 years
Residency tax within the EU in a white-listed country
Free cash remittance to Portugal
The NHR program offers a 20% flat rate on certain Portuguese-source incomes from qualifying professions and from self-employment.
Acquire residency in Portugal
Become a tax resident of Portugal
Create a Portuguese tax number (NIF), this should be linked to a Portuguese address
You must hold above documents and make sure to comply with the deadline to apply for the NHR in the Finanças portal
The deadline of your NHR application is every March 31st of the following year in which you become a tax resident
NHR benefits are valid for a period of 10 years, counting from the date you become a tax resident of Portugal
NHR program is non-renewable
Portugal can offer a number of benefits if you become a non-habitual resident. Your rental income, real estate gains, interest on savings, dividends can potentially be tax exempt in Portugal as long as they are from outside the country.
Important note: To be eligible to NHR the source of income should be taxable in the country of origin, as the EU doesn’t want Portugal to become the next tax haven. The NHR application of the source of income will also depend on individual double tax treaties (DTAs) between Portugal and the country in question.
The NHR status for incomes earned within Portugal are eligible for a flat rate of 20% tax, should fall under the category of employment, freelancers and self-employed as long as your profession is classed as a “high added value activity” and you are able to prove:
Level 4 qualification under the European Qualifications Framework
Level 35 of the International Standard Classification of Education
5 years of proven professional experience
The non-habitual resident program is an opportunity to consider moving to Portugal, however it is always important to talk to a specialist and see what better fits your needs and expectation, as the program is not a magical zero tax situation.
Not to worry, we can definitely recommend a qualified tax advisor with experience in the Portuguese system.