Non Habitual Resident in Portugal

what is

NHR in Portugal

The non-habitual resident (NHR) regime is open to anyone who has the right to reside in Portugal (an EU/EEA/Swiss citizen or a holder of a residence permit) and has not been a tax resident of the country during the previous 5 years. Hence "non-habitual", not a particularly well-chosen name.

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Stay Requirements

‍Although the individual must be deemed a resident of Portugal when he/she submits the application, there is no minimum stay requirement afterwards and it is even possible to stop being a Portuguese tax resident for one or more years without losing non-habitual resident status.

NON HABITUAL RESIDENT

Taxation of NHR

Under this regime, the following taxation rules apply:

Self-employment or sole trader income

Foreign-source self-employment or sole trader income derived from an eligible occupation, royalties, capital gains and investment or rental income will be exempt from Portuguese tax as long as they may be taxed in the source country either under a double taxation agreement or under the OECD model tax convention. In addition, such income must not be deemed Portugal-sourced under applicable Portuguese law, and must not be sourced from a blacklisted tax haven.

Foreign-source employment income

Foreign-source employment income will be exempt from Portuguese tax as long as it is liable to tax (at whatever rate) in the source country either under a double taxation treaty or under the OECD model tax convention, and is not deemed Portugal-sourced under applicable Portuguese law.

Occupational pension income

Occupational pension income will be exempt from Portuguese tax as long as it isliable to tax in the source country under a double taxation treaty or it is deemed as not being Portuguese-source income under applicable Portuguese law.

Flat rate of 20% for eligible occupations

If your occupation is eligible, Portugal-source employment or self-employment / sole trader income will be taxed at a flat rate of 20%, while other Portugal-sourced types of income will be taxed at the rates for resident taxpayers, the calculation of the applicable marginal tax rate taking into account all income, including exempt income.

Wealth and inheritance taxes

In Portugal there is no wealth tax or capital duty, and an inheritance or a gift received by a spouse, descendant or ascendant is tax exempt. Inheritance or gifts will be either not taxable under territoriality rules, or else may be subject to a flat 10% stamp duty.

NHR Requirements

In order to qualify as a “non-habitual resident”, a Portuguese national or a foreign individual having the right to live in Portugal you must:

Register as a tax resident of Portugal
Not having been resident in this country during at least the previous 5 years.
EU, EEA and Swiss citizens have an automatic right to live in Portugal, and individuals of other nationalities must obtain a residence permit.
Recognition of non-habitual resident status is not automatic and is granted for a period of 10 years upon successful application.
Only in the event the tax authorities have doubts concerning the truth of what is stated will they request additional documentation

Non habitual Resident

NHR in Portugal

Stay Requirements

Taxation of NHR

NHR Requirements

In order to qualify as a “non-habitual resident”, a Portuguese national or a foreign individual having the right to live in Portugal you must:

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