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.
![tax-color lei imigracao](https://i0.wp.com/rme-legal.com/wp-content/uploads/2022/01/tax-color.png?resize=512%2C512&ssl=1)
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.
![ENG_NHR](https://i0.wp.com/rme-legal.com/wp-content/uploads/2022/06/ENG_NHR.png?resize=1080%2C388&ssl=1)
Non-Habitual Resident Portugal
Tax Resident 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
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.
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.
What is required to apply for NHR status?
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?
When should I apply for NHR?
Is it mandatory to live in Portugal to apply for the NHR status?
Benefits of NHR Status
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.
![Non-Habitual Resident Portugal](https://i0.wp.com/rme-legal.com/wp-content/uploads/2022/08/imigracao07.jpg?w=1080&ssl=1)
![Tax Resident in Portugal](https://i0.wp.com/rme-legal.com/wp-content/uploads/2022/08/imobiliario03.jpg?w=1080&ssl=1)
![Non-Habitual Resident Status](https://i0.wp.com/rme-legal.com/wp-content/uploads/2022/08/imigracao06.jpg?w=1080&ssl=1)
![Benefits of NHR Status](https://i0.wp.com/rme-legal.com/wp-content/uploads/2022/08/imigracao04.jpg?w=1080&ssl=1)
INSIGHTS
Insights ABOUT TAX LAW
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The “Non-Habitual Resident Tax Regime” benefits
The “Non-Habitual Resident Tax Regime” (NHR) offers tax benefits to eligible individuals who become tax residents in Portugal.
Contact Us
Contact us for more information about the tax regime of the Non-Habitual Resident (NHR).
Contact Us
Contact us for more information about the tax regime of the Non-Habitual Resident (NHR).