Non Habitual Resident (NHR) Program in Portugal

The Non-habitual resident (NHR) program was created by the Portuguese government in 2009 to attract and support foreigners and investors to Portugal by implementing a special tax regime to new residents that offers reduced personal income tax (PIT) rates and exemptions on some taxes on income from skilled work, liabilities, and pensions.

The special NHR status can be enjoyed for a maximum of 10 years, offering great opportunity by its special tax treatment to non-residents who would like to establish permanent or temporary residence in Portugal.

How much is the tax in Portugal for non-habitual residents?

Grants eligible applicants a flat 20% tax rate on Portugal sourced income

The holders of a NHR are exempt from paying taxes on global income
Foreign investors may acquire a Portugal Golden Visa and optimise their taxes by applying for a NHR status as well

NHR can also lead to exemption from Portuguese taxation on income sourced from outside Portugal, subject to certain criteria including dual taxation agreements with other countries.

What are the benefits for non-habitual residents?

Exemption of tax on inheritance or gifts to family members

Exemption of wealth tax

Exemption of tax on almost all foreign sources of income

Special tax treatment on income tax during 10 years

Residency tax within the EU in a white-listed country

Free cash remittance to Portugal

The NHR program offers a 20% flat rate on certain Portuguese-source incomes from qualifying professions and from self-employment.

Eligibility and steps for non-habitual residents

Acquire residency in Portugal

Become a tax resident of Portugal

Create a Portuguese tax number (NIF), this should be linked to a Portuguese address

You must hold above documents and make sure to comply with the deadline to apply for the NHR in the Finanças portal
The deadline of your NHR application is every March 31st of the following year in which you become a tax resident

NHR benefits are valid for a period of 10 years, counting from the date you become a tax resident of Portugal
NHR program is non-renewable

How will my foreign source of income be considered?

Portugal can offer a number of benefits if you become a non-habitual resident. Your rental income, real estate gains, interest on savings, dividends can potentially be tax exempt in Portugal as long as they are from outside the country.

Important note: To be eligible to NHR the source of income should be taxable in the country of origin, as the EU doesn’t want Portugal to become the next tax haven. The NHR application of the source of income will also depend on individual double tax treaties (DTAs) between Portugal and the country in question.

What if I have a Portuguese-source income?

The NHR status for incomes earned within Portugal are eligible for a flat rate of 20% tax, should fall under the category of employment, freelancers and self-employed as long as your profession is classed as a “high added value activity” and you are able to prove:

Level 4 qualification under the European Qualifications Framework

Level 35 of the International Standard Classification of Education

5 years of proven professional experience

High value-added activities list for non habitual resident Portugal status

1. General director and executive manager of a company;
2. Directors of administrative and commercial services;
3. Directors of production and specialized services;
4. Directors of hotel, restaurant, commercial and other services;
5. Specialists working in physical sciences, mathematics, engineering and similar technical fields;
6. Physicians;
7. Dentists and stomatologists;
8. Teachers at universities and higher learning establishments;
9. Specialists in information and communication technologies (ICT)
10. Authors, journalists and linguists;
11. Creative artists and performing artists;
12. Intermediate level science and engineering technicians and professionals;
13. Information and communication technologies technicians;
14. Market oriented farmers and qualified agricultural and livestock workers;
15. Market oriented qualified forestry, fisheries and hunting workers;
16. Qualified industrial, construction workers and craftsmen, including qualified workers in the fields of metallurgy, metalworking, food processing, wood manufacturing, clothing production, handicrafts, printing, manufacture of precision instruments, jewellers, artisans, electricity and electronics workers;
17. Operators of installations and machines and assembly workers, namely fixed installations and machine operators.

(Source: Newco).

Interested?

The non-habitual resident program is an opportunity to consider moving to Portugal, however it is always important to talk to a specialist and see what better fits your needs and expectation, as the program is not a magical zero tax situation.

Not to worry, we can definitely recommend a qualified tax advisor with experience in the Portuguese system.