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NHR
'granted for 10 years'
NHR Status
The Portuguese Non-Habitual Residency status enables those who become tax resident in Portugal, and are accepted as NHR, the opportunity to receive qualifying income, tax free both in Portugal and in the country of source of the income.
The NHR regime represents a major step forward in making Portugal a tax free jurisdiction for individuals in receipt of qualifying non-resident income.
This attractive regime also covers professional income from high value-added activities, which benefit from a special flat tax rate of 20%.
The sole requirement to benefit from this preferential treatment is to become a Portuguese tax resident, not having been a tax resident in Portugal in the previous five years.
Why?
The government introduced the Non-Habitual Resident (NHR) regime in 2009 to encourage individuals and families to move to Portugal to live and work.
It provides beneficial tax treatment for the first 10 years of residence, and is open to those in employment, as well as retirees who could potentially find their foreign pension income is tax free.
Elegible income?
Pensions, dividends, royalties and interest from non-Portuguese sourced income are exempt from personal income tax in Portugal. Certain types of salaries, provided they are paid from a non-Portuguese source, can also be exempt from tax.
How to apply?
You may apply when you have become a Portuguese tax resident or before 31st March of the following tax year. If you wish to apply for the NHR regime, we can offer support.
Guarantees?
Whilst there are no guarantees that applications will be successful, there is no reason for the registration to be rejected. As long as the NHR applicant fulfils all the legal requirements of Portuguese tax residency and the specific requirements to become a NHR.
Benefits?
A Non-Habitual Resident (“NHR”) will be exempt from personal income tax on certain types of qualifying income if this income is subject to tax in the country of source under an existing Double Tax Treaty that allows for this or, if no Tax Treaty exists, were subject to tax in another jurisdiction and are not considered as Portuguese source income under domestic rules. Certain types of qualifying income under the regime will also benefit from a double tax exemption i.e. an exemption in Portugal and in the source jurisdiction. A special flat rate of 20% is also applicable for certain types of income arising from a number of highly qualified activities.
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