Your search results

Non-Habitual Resident

The Tax Regime for Non-Habitual Residents (“NHR”) establishes a very favorable regime for foreigners who decide to establish their tax residence in Portugal. The “RNH” is effectively one of the most competitive European regimes in this area.

Who is eligible?

The status can be attributed to individuals who, becoming resident in Portugal, have not been Portuguese tax residents in the five years prior to the change of residence. To be considered a tax resident in Portugal, the person must have to have a house that qualifies as a habitual residence.

A non-habitual resident is an individual who:

  • becomes a resident taxpayer for the purposes of the Individual Tax Code (“IRS Code”);
  • was not a resident taxpayer for IRS purposes in the 5 years prior to the application of the regime.

As a rule, an individual is considered a resident taxpayer if:

  • stay more than 183 days in Portuguese territory; or,
  • regardless of the time spent in Portuguese territory, have their own permanent home in Portugal on December 31 of the tax year in question.
Yoga in Carcavelos beach – Lisbon

Requirements based on citizenship

  • Citizens of a Member State of the European Union: change of residence does not require any special formality, it is only necessary to prove the ownership of an address in Portugal (through a lease or purchase of a property for own and permanent housing);
  • Citizens outside a Member State of the European Union: in addition to the document proving the ownership of a dwelling in Portugal, you will have to obtain, in advance, a residence permit without which the respective registration will not be possible with the Tax and Customs Authority.

Benefits of the Non-Habitual Resident program

Income obtained in Portugal

  • Income from work or independent professional activity obtained within the scope of a high added value activity (described in Ordinance 12/2010): taxed at an autonomous rate of 20%;
  • Income from work or professional activity that is not obtained in the context of high value-added activities and pension income: subject to taxation in accordance with general rules, with progressive rates applicable up to a maximum of 48% ;
  • Other income: namely, interest, dividends, capital gains and rents obtained in Portugal (ie, owed by entities based in Portugal) will be subject to taxation at the special rate of 28%.

Income earned abroad

  • Income under an Agreement to Avoid Double Taxation (DT) entered into by Portugal: exempt from taxation in Portugal;
  • Income obtained without Agreement to Avoid Double Taxation (DT): there will only be exemption from taxation in Portugal if the income is subject to tax in the country of origin and cannot be considered as originating in Portugal;
  • Income derived from professional activity obtained within the scope of a high added value activity, as well as passive income (such as interest, dividends, rents, royalties, real estate capital gains, etc….): exempt tax in Portugal as long as they can be taxed abroad under the DT.

Pension income

  • Pensions paid by non-resident entities will be taxed at the autonomous rate of 10% in Portugal.
  • If you are interested in knowing more about this program, contact us.

Compare Listings