PORTUGAL NON-HABITUAL RESIDENTS” (NHR) TAX REGIME

What is?
The NHR tax regime was introduced to attract highly skilled professionals, high net worth individuals and foreign pensioners to Portugal.
Who can apply: NHR are individuals who became resident in Portugal, and five years prior they were not domiciled, for tax purposes, in Portugal and exercise one of the following professions:.

  • Company’s General Manager and Executive Manager
  • Administrative and Comercial Services Directors;
  • Specialized Products and Services Directors Diretores de produção e de serviços especializados
  • Hospitality, Catering Commerce and other Services Directors;
  • Specialists in Physical, Mathematical, Engineering Sciences and related technics;
  • Doctors
  • Dentists and Stomatologists Physicians
  • University and Higher Education Teacher
  • Information and Communication Technologies
  • Specialists

  • Authors, Journalists and linguists
  • Creative Artists
  • Technicians and professions of science and engineering,
  • intermediate level

  • Information and Communication Technologies Technicians
  • Farmers and Qualified Farm workers and animal production, market orientated;
  • Forest, fishing and hunting qualified workers, market orientated
  • Artisans and Industrial and Construction qualified
  • workers

  • Instalation and Machinery operators and assembly workers.
  • Directors and managers of companies that promote productive investment working for specific projects and with tax incentive contracts signed.
Benefits:
  • The NHR tax regime is applicable for ten consecutive years from the year of NHR Registration (included);
  • The NHR Portuguese-sourced employment income (category A) and/or self-employment income (category B) obtained from high added value activities (scientific, artistic or of technical naturee ) are subject to a flat 20% IRS tax rate (the current maximum standard tax rate for a non-NHR is 53%);
  • Pension income obtained abroad by the NHR is tax exempt, provided that one of the following conditions met:
  • that income was taxed in a Country with whom Portugal has entered the Double Taxation Avoidance Agreement; or,
  • that income cannot be considered as obtained in the Portuguese territory, according to the Portuguese Tax Income criteria.
  • Further exemptions may be obtained if
  • that income was taxed in a Country with whom Portugal
  • has entered the Double Taxation Avoidance Agreement; or,
  • Has not entered the Double Taxation Avoidance Agreement and that income cannot be considered as obtained in the Portuguese territory.
That income derived from
  • high added value services activities (that are of scientific, artistic or technical nature );
  • intellectual or industrial property area (i.e. royalties); or
  • the provision of information services in the industrial, commercial or scientific sector
  • investment income, rental income and capital gains that also benefited from an exemption provided that such income may be taxed in a Country with whom Portugal
  • has entered the Double Taxation Avoidance Convention; or,
  • has not entered Double Taxation Avoidance Convention and that income cannot be considered as obtained in the Portuguese territory, except for blacklisted jurisdictions (“tax havens”).
  • Portugal does not tax any taxation on donations and inheritances to spouses and direct descendants and direct relatives in the ascending line.

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