What is it?
The non-habitual resident (“NHR”) taxation regime came into force in Portugal in 2009 and is proving very successful at attracting individuals of independent means, pensioners and certain skilled professionals to establish residency in Portugal for tax purposes, while not being subject to any minimum or maximum stay requirements. In addition to the non-existence in Portugal of wealth tax, or of inheritance/gift tax for close relatives, the NHR regime essentially grants qualifying individuals the possibility of becoming tax residents of a white-listed jurisdiction, whilst legally avoiding or minimising income tax on certain categories of income and capital gains for a minimum period of 10 years.
Concept
In order to qualify as a non-regular resident, it is necessary:
a) To be a tax resident in Portugal: A tax resident in Portugal is someone who remains in Portuguese territory for more than 183 days (consecutively or not) per annum, or who having remained less time, as of the 31st of December of that year, has the housing conditions that show that they intend to maintain and occupy their property as a residence (for 183 days per annum) the following years.
b) Not to have been deemed as a tax resident in Portugal in the last 5 years prior to the application of the regime:
This regime also applies to migrants who want to return to Portugal.
The taxable person deemed non-regular resident acquires the right to be taxed as such during a period of 10 consecutive years, from the year of their registration as a resident in Portuguese territory, having to comply with the requirement of residence every year.
Income Tax Regime Portugal Spain
To be considered tax resident in Portugal in a given year and not having been taxed as such in any of the previous five years
Income from Portuguese sources:
By choice, may not be included income from categories A and B, when these are caused by activities with high added value, such as architects, engineers, artists, actors and musicians, auditors, tax consultants, doctors and dentists, professors, investors, administrators and managers, senior executives.
Income from foreign sources:
Income from foreign sources – dependent work – is exempt from taxation in Portugal, since it is actually taxed in the source State, and provided they are not deemed obtained in Portuguese territory. The income from foreign sources – pensions – are exempt from taxation in Portugal, since they are actually taxed in the source State or they are not deemed obtained in Portuguese territory.
Other Requirements
- To obtain the Portuguese Tax Identification – Number from the Tax Authority;
- To open a bank account in Portugal;
- With regard to mandatory enrolment in Social Security, it should be noted that it is only required if the non-regular resident’s income is from category A or B in Portugal. In this sense, if they are not covered by Social Security, they should the non-regular residents carry a valid health insurance, to ensure health and accident protection, or alternatively, have the European health card, in case of European citizens, in order to be adequately protected in case of illness or accident in the country.