Non-Habitual Resident

The tax regime of the Non-Habitual Resident (NHR) is a special tax regime aimed at attracting foreign investors, highly-skilled professionals, and retirees to live in Portugal.

NHR Updates

The Portuguese Parliament has approved the termination of the NHR tax regime.

Please see all the information about the transitory period – here.

Please check the NEW NHR TAX REGIME: IFICI – here.

This regime offers tax benefits, ranging from tax exemptions to reduced rates, for a period of 10 years, to eligible individuals who become tax resident in Portugal applicable to specific types of income.

It operates based on the interaction between Portuguese tax legislation, double taxation agreements (DTAs) signed by Portugal, the OECD Model Convention, and the tax rules of the country of origin of the income, if necessary.

Tax Benefits for Foreign Investors in Portugal.

Non-Habitual Resident Portugal

Non-Habitual Residents in Portugal must file annual tax returns. Within the same category of income, the country of origin of the income, the specific conditions of the beneficiary, or their income structure may determine different taxation rules.

Non-Habitual Resident

Tax Resident in Portugal

The applicants must be considered tax resident in Portugal. To do so, they must be in Portugal for more than 183 days or have their permanent residence in Portugal.

The legal deadline to apply for the NHR tax regime is March 31st of the year following the one in which you must be considered a tax resident in Portugal.

If you are not a Portuguese national, you will need to obtain a residence permit in Portugal or request a residence certificate as an EU citizen. Please consult our Immigration Law services for legal assistance.

Non-Habitual Resident Status

To apply for Non-Habitual Resident status, you need to register as a resident in Portugal for immigration purposes and not to have been considered a resident in the five years prior to the year in which you become a tax resident in Portugal. Once the eligibility requirements are met, the application can be made online.

EU/EEA/Swiss Citizens must obtain a residence certificate within the first four months after establishing their residence in Portugal.

Non-EU/EEA/Swiss Citizens must obtain a residence permit to reside in Portugal under one of the existing legal options, such as D7 Visa, Golden Visa, or the family reunification scheme.

After 5 years of legal residence in Portugal, it is possible to apply for permanent resident status or citizenship, which is compatible with the NHR tax regime.

Enjoy tax benefits for a period of 10 years.

In 2009, Portugal introduced a tax regime for “Non-Habitual Residents” (NHR), with the aim of persuading highly qualified professionals, pensioners and high net worth individuals to live in the country, offering special tax conditions for specific types of income.

The tax benefits of the NHR special tax regime are defined by type of income and consist of potential tax exemptions or reduced rates for a period of 10 years.

The NHR tax regime works on the basis of the interaction between Portuguese tax legislation, double taxation agreements (DTAs) signed by Portugal, the OECD Model Tax Convention and the tax rules of the country of origin of the income, if necessary.

What is required to apply for NHR status?

Registration as a resident in Portugal for Immigration and Tax purposes is required, and the applicant cannot have been considered a resident for tax purposes in the five years preceding the year in which he or she becomes a tax resident in Portugal. Once the eligibility requirements are met, an application is made online.

Citizens of the EU/EEA/Switzerland must obtain a residence certificate by the end of the fourth month after having established their residence in Portugal. Citizens of non-EU/EEA countries and Swiss citizens must obtain a residence permit to reside in Portugal under one of the existing legal options, e.g.: D7 visa, golden visa or under the family reunification system.

After 5 years of legal residence in Portugal, it is possible to apply for permanent resident status or citizenship, which is compatible with the NHR tax regime.

Does NHR grant residency rights?

No. NHR is a tax regime. It does not replace a residence permit or a certificate of residence as an EU citizen.

When should I apply for NHR?

The legal deadline to apply for the NHR tax regime is 31 March of the year following the year in which you should be considered a tax resident in Portugal.

Is it mandatory to live in Portugal to apply for the NHR status?

Yes. To be eligible and maintain NHR status, the applicant must be considered a resident for tax purposes in Portugal. For this, you must stay in Portugal for more than 183 days or have your place of residence in Portugal under such conditions as to be considered your permanent residence. There are specific conditions for special cases that may apply. Contact us for advice.

Benefits of NHR Status

The benefits of NHR status depend on the requirements established in Portuguese law. Most of them comply with specific taxation rules determined in double taxation agreements signed by Portugal and are related to:

Tax Exemption

Tax exemption in Portugal for dependent employment income should apply to income of foreign origin and effectively taxed at source, regardless of the rate and whether the country of origin is a country or territory subject to a more favourable tax regime, considered obtained outside Portugal under Portuguese law. An analysis of applicable Social Security rules may be required, especially for remote work.
Tax exemption in Portugal for independent work income should apply to income considered of foreign origin according to Portuguese law, provided it is related to a high-value-added activity and can be taxed at source under a double taxation agreement or, in the absence of the latter, under the OECD Model Tax Convention, especially if obtained through the individual’s fixed establishment in another country. When the country of origin is included in Portugal’s list of countries, territories, or regions with a privileged and more favourable tax regime, NHR tax benefits may not apply.

When the conditions for exemption are not met or when the income is considered obtained in Portugal under national law, dependent and independent work income may be subject to a flat rate of 20%, if derived from an eligible professional occupation.

Royalties, Dividends, and Interest/ Capital Gains on Securities/ Real Estate Income, and Capital Gains

Tax exemption should apply to income considered of foreign origin that can be taxed at source under a DTA or the OECD Model Convention rules.

When the country of origin is included in Portugal’s list of countries, territories, or regions with a privileged and more favourable tax regime, NHR tax benefits may not apply, and the income may be subject to an increased tax rate in Portugal.

Pension Income

Reduced tax rate of 10% should apply to pension income considered not obtained in Portugal according to national law. The same taxation rules may apply to pre-retirement income, income from pension funds and retirement savings funds, advance payments, or capital refunds, with a case-by-case analysis advisable.

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