The special tax regime for Non-Habitual Residents aims to attract talent in “high value-added activities”, as well as Ultra and High Net Worth Individuals (UHNWIs) and their families to Portugal, providing a very attractive tax regime for individuals.
A stable and friendly tax environment for individuals in the European Union.
- Benefits of the special tax regime for Non-Habitual Residents (NHR) in Portugal
- Conditions to qualify as non-habitual tax resident
- Other beneficial aspects of the Portuguese tax system for individuals
Benefits of the special tax regime for Non-Habitual Residents (NHR) in Portugal
- A special tax rate of 20% applicable to employment and self-employment income derived from a “high value-added activities”.
- A tax exemption (with progression) on foreign-source income (e.g. professional income, rental income, capital gains, interest, dividends, as well as other investment income), provided certain conditions are met. In most cases, capital gains on the sale of securities are taxable at a flat rate of 28%.
- A flat tax rate of 10% on pensions from a foreign source, as well as to other payments from pension funds and similar retirement schemes.
An individual may benefit from this regime during a 10-year period starting from the year of his/her registration as tax resident in Portugal.
Conditions to qualify as non-habitual tax resident
To qualify as non-habitual tax resident, an individual must:
- be tax resident in Portugal in a certain year;
- have not been tax resident in the previous 5 years.
In general terms, an individual is deemed to be tax resident in Portugal if one of the following conditions is met:
- more than 183 days are spent in Portugal in any 12-month period starting or ending in the tax year concerned; or
- maintains a residence suggesting being a habitual residence in Portugal in any period within the above 12-month.
Depending on the circumstances, the splitting of the tax year may be applicable, i.e., an individual may be considered as tax resident only during a part of the year.
Other beneficial aspects of the Portuguese tax system for individuals
- A tax exemption for gifts or inheritances to spouse, descendants or ascendants. Inheritance or gifts to other individuals will be either not taxable, due to the territoriality rules, or subject to a flat 10% stamp tax rate.
- No wealth tax and free remittance of funds either in Portugal or abroad.
- A beneficial tax regime for individuals starting a self-employment activity in Portugal.
- Beneficial tax treatment for pensions and other life insurance products (including unit linked) may reduce the effective tax burden on the income received.
- Portugal takes advantage of the EU non-discrimination rules and has signed more than 60 double tax treaties, offering interesting opportunities in a tax friendly environment.
→ Why Portugal should be your top tax choice?
Portugal is part of the European Union, the Euro Zone and the Schengen area. With a stable political and social environment, a secure society, a highly skilled and English fluent labor force and an excellent quality of life, it is not a surprise that Portugal is becoming a top choice for highly qualified workers, entrepreneurs and ultra and high net worth individuals who wish to take up residence in the European Union.
Why Portugal?
Geostrategic position
between Europe, America and Africa.
7th highest English proficiency
among non-native speakers in the world
10
Airports
2.562 km
Railways
5th Best country
in quality of life for expatriates
4 Years
Best city break destination in the world
3 Years
Best tourism destination in the world
5 Years
Best golf destination in the world
How can we assist?
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A comprehensive analysis of the tax implications of moving to Portugal, considering the non-habitual residents regime, as well as other applicable tax regimes.
■Assistance with the tax registrations before the Portuguese tax authorities and with the application for the non-habitual residents status.
■Tax compliance assistance, including with the preparation and filing of Portuguese personal income tax return (including a tax estimate) and related compliance.
■Ongoing tax advice with any Portuguese tax matters.
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