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The Non-Habitual Resident (NHR) Portugal program is a tax regime that offers foreign residents and investors reduced tax rates and exemptions on some taxes. It was introduced in 2009 and updated in 2020.
The aim is to attract foreigners to Portugal. It proved to be very successful with more than 10.000 non-habitual residents enjoying benefıts in Portugal.
Below, you can find all the details of the Non-Habitual Residence (NHR) Program; what it is, how you can benefit from it, and more.
The Non-Habitual Resident (NHR) Portugal program is a tax regime that offers foreign residents and investors reduced tax rates and exemptions on some taxes. It was introduced in 2009 and updated in 2020.
The aim is to attract foreigners to Portugal. It proved to be very successful with more than 10.000 non-habitual residents enjoying benefıts in Portugal.
Below, you can find all the details of the Non-Habitual Residence (NHR) Program; what it is, how you can benefit from it, and more.
What is NHR Tax Regime Program?
What is NHR Tax Regime Program?
Advantages
The advantages of the NHR Program in Portugal include:
- Income tax: special individual tax treatment on incomes for a period of 10 years
- Tax Exemption on almost all foreign sources of income
- Compared to other Portuguese income tax rates up to 48%, this program offers a 20% flat rate on certain Portuguese-source incomes (from determined professions and from self-employment)
- Opportunity to have tax residency within the EU in a white-listed country
- Exemption of tax on gifts or inheritance to family members
- No wealth tax
- Free cash remittance to Portugal
Advantages
The advantages of the NHR Program in Portugal include:
- Income tax: special individual tax treatment on incomes for a period of 10 years
- Tax Exemption on almost all foreign sources of income
- Compared to other Portuguese income tax rates up to 48%, this program offers a 20% flat rate on certain Portuguese-source incomes (from determined professions and from self-employment)
- Opportunity to have tax residency within the EU in a white-listed country
- Exemption of tax on gifts or inheritance to family members
- No wealth tax
- Free cash remittance to Portugal
1. You must have the right to be a resident in Portugal by being an EU/EEA/Swiss citizen or via the Portugal Golden Visa Program, and
2. You should not have been a Portuguese tax resident in the preceding five years
To establish a tax resident status in Portugal, you must hold a place of abode by the 31st of December of that year to show your intention that Portugal will be your habitual home.
It can be useful to buy a Portuguese property, but you don’t have to. A Portuguese rental contract of 12 months will be sufficient as a proof of residency. If you decide to buy a property, you can show your purchase deed as proof of being a resident.
After holding a place of abode, you should apply for the Non-Habitual Resident program in Portugal until the 31st of March of the next year.
A reminder: Individuals who have the right to be a resident in Portugal through the Golden Visa Program can apply for the Non-Habitual Resident program.
1. You must have the right to be a resident in Portugal by being an EU/EEA/Swiss citizen or via the Portugal Golden Visa Program, and
2. You should not have been a Portuguese tax resident in the preceding five years
To establish a tax resident status in Portugal, you must hold a place of abode by the 31st of December of that year to show your intention that Portugal will be your habitual home.
It can be useful to buy a Portuguese property, but you don’t have to. A Portuguese rental contract of 12 months will be sufficient as a proof of residency. If you decide to buy a property, you can show your purchase deed as proof of being a resident.
After holding a place of abode, you should apply for the Non-Habitual Resident program in Portugal until the 31st of March of the next year.
A reminder: Individuals who have the right to be a resident in Portugal through the Golden Visa Program can apply for the Non-Habitual Resident program.
Eligibility: Who can be a Non-Habitual Resident
Eligibility: Who can be a Non-Habitual Resident
Some professions are considered as a high added value to Portugal. These professions mainly have economic and cultural worth. So, individuals who practice one of the professions listed below are given generous tax exemptions:
Some professions are considered as a high added value to Portugal. These professions mainly have economic and cultural worth. So, individuals who practice one of the professions listed below are given generous tax exemptions:
Professions Regarded as High Added Value
Professions Regarded as High Added Value
Tax on Foreign Source Income
Tax on Foreign Source Income
Under the NHR regime, most of the beneficiaries’ income from a foreign source is exempt from taxation in Portugal for ten consecutive years. It means that if the income is from an external source, that has a DTA (Double Taxation Agreement) with Portugal, then the income will not be subject to taxation in Portugal.
DTA (Double Taxation Treatment): It is a treaty between two or more countries, mainly to avoid double taxation of income and property. It aims to divide the taxation between the contracting countries in the right way, to avoid tax evasion, to secure the taxpayers’ rights, and to avoid differences.
Under the NHR regime, most of the beneficiaries’ income from a foreign source is exempt from taxation in Portugal for ten consecutive years. It means that if the income is from an external source, that has a DTA (Double Taxation Agreement) with Portugal, then the income will not be subject to taxation in Portugal.
DTA (Double Taxation Treatment): It is a treaty between two or more countries, mainly to avoid double taxation of income and property. It aims to divide the taxation between the contracting countries in the right way, to avoid tax evasion, to secure the taxpayers’ rights, and to avoid differences.
