Practising tax law allows us to provide comprehensive assistance on legal matters in Portugal.
You must pay taxes. But there is no law that says you must leave a tip.
– Morgan Stanley
Consultancy and professional advice regarding the new challenges and tax rules applicable to situations of mobility within a context of globalisation.
We provide tax advice and assistance during the process of obtaining residence in Portugal. In particular, we analyse and evaluate the eligibility of the various kinds of income for application of benefits under the NHR tax regime, considering the applicable rules in terms of internal legislation, community legislation, double taxation agreements and international rules.
Non-residents who receive income from Portuguese sources must inform themselves regarding their tax liabilities in Portugal, as well as analyse the rules for avoiding double taxation.
RESIDENCE FOR TAX PURPOSES
Portugal has no wealth tax or inheritance tax and recognises tax exemption on donations to close family members.
NON-HABITUAL RESIDENTS (NHR)
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 in Portugal for income from employed work should be applied to income from a foreign source effectively taxed at source (considered the country of source of the income under the Portuguese rules and double tax agreement rules), regardless of the rate and whether the country of origin is a country or territory subject to more favourable taxation arrangements, when considered obtained outside Portugal, under Portuguese law. It may be necessary to analyse the applicable Social Security rules, in particular when working remotely.
The tax exemption in Portugal for income from self-employment should apply to income considered to be from foreign sources in accordance with Portuguese legislation, provided that it is related to a high value added activity and provided that it can be taxed at source under a double taxation agreement or, in the absence of the latter, under the OECD model tax convention, namely because they are obtained through the fixed establishment of the natural person in the other country. When the country of origin is included on the Portuguese list of countries, territories or regions with privileged and more favourable tax arrangements, the NHR tax benefits may not be applicable.
When the conditions for exemption are not met, or when the income is considered earned in Portugal, under the terms of national law, income from employed and self-employed work may be taxed at a fixed rate of 20%, if derived from an eligible professional occupation.
Royalties, Dividends and Interest / Capital Gains on the Sale of Securities / Real Estate Income and Capital Gains
The tax exemption should apply to income deemed to be of foreign origin that may be taxed at source under a DTA or under the rules of the OECD model convention.
When the country of origin is included on the Portuguese list of countries, territories or regions with privileged and more favourable tax arrangements, the NHR tax benefits may not apply, and the income may be subject to an increased tax rate in Portugal.
Taxation at a reduced tax rate of 10% shall apply to pension income that is not considered earned in Portugal, in accordance with national law. The same taxation rules may apply to pre-retirement income, income from pension funds and retirement savings funds, advance payments or principal repayments, and a case-by-case analysis is advisable.
TAXES IN PORTUGAL
The NHR regime does not supersede other tax laws applicable in Portugal. According to the NHR tax regime, you will be required to satisfy all other compliance requirements concerning taxes in force in Portugal relating to property ownership, vehicle ownership, VAT, etc.
Talk to us for an analysis in the area of tax law.
- Golden Visa;
- Family reunification;
- “D7 Visa”
- “D2 Visa”
- Long-term residence permit issued by another EU member state;
- Residence permit for study, unpaid internship and voluntary work;
- EU Blue Card;
- Residence permit for work;
- Residence permit for activities in higher education and research and highly qualified;
- “Startup” Visa.
Insights ABOUT TAX LAW
Non-Residents Real Estate Capital Gains Tax – Understanding the taxation of Non-Residents Real Estate Capital Gains in 2022 and 2023
The “Non-Habitual Resident Tax Regime” (NHR) offers tax benefits to eligible individuals who become tax residents in Portugal.
We have watched a growing number of digital nomads arriving to Portugal during the past year. Some of them stay in the country for short periods of time, without effectively stablishing residency for Immigration or Tax purposes.
Contact us for an analysis in the area of tax law.
Contact us for an analysis in the area of tax law.