Non Habitual Resident Tax Regime
Contrary to what may be imagined, the expression “non habitual resident” does not relate to a type of residence permit.
The Investment Tax Code, created by Decree-Law n. 249/2009, approved on September 23rd, implemented a Personal Income tax system for the non-habitual resident, with the purpose of attracting to Portugal non-resident professionals qualified for activities with high added value intellectual or industrial propriety or know-how, as well as beneficiaries of pension schemes granted abroad.
The NHR regime establishes, under certain conditions, IRS exemptions on foreign source income, as well as a limited 20% taxation of income from employment and independent personal services, in both cases if deriving from listed high value-added activities.
Who may apply for the NHR regime?
The non-habitual resident tax regime is available for citizens meeting the following conditions:
- An individual who is considered, for tax purposes, resident in Portuguese territory, in the year in which it intends to start taxation as a non-habitual resident;
- An individual who has not been considered a resident in Portuguese territory in any of the 05 (five) years prior to the year in which he intends to start taxation as a non-habitual resident;
In order to be considered as a tax resident, the interested party must have stayed in Portugal for more than 183 days, interim or consecutive, or must have a property or renting agreement in Portugal.
For how long may I enjoy the NHR status?
A citizen deemed non-regular resident has the right to be taxed according to the non-regular resident tax scheme during a period of 10 consecutive years, from the year of the registration as a resident on Portuguese territory, as long as continues to be deemed resident in each of the 10 years. This period of 10 years is not extendable.
Please note that the right to be taxed according to the non-regular resident tax regime in each year of the above-mentioned period depends on the fulfilment of the condition of being deemed resident on Portuguese territory