A Comprehensive Guide to the Non-Habitual Resident (NHR) Tax Regime in Portugal
Discover the added benefits of residency in Portugal which go beyond its low cost of living and high quality of life. The Non-Habitual Resident (NHR) tax regime has attracted thousands over the years with its reduced personal tax rates and 10-year full tax exemption on most worldwide income.
The NHR program offers both a flat tax rate of 20% on your income in Portugal and a 100% tax exemption on globally-earned income when qualified. Learn how to obtain long-term residency in Portugal and take advantage of this attractive program by reading our comprehensive guide.
"A good tax strategy can save you money and reduce your stress levels." - Robert Kiyosaki
The Inside Scoop on the Non-Habitual Resident (NHR) Tax Regime in Portugal
The NHR tax regime was established in 2009 to attract "high-value" talent and wealth to Portugal and is open to qualifying people who were not Portugal tax residents for the previous 5 years. When granted, NHR status is for a one-time, 10-year period, and is not renewable. After the 10-year period, you will become a regular tax resident and be subject to traditional in-force fiscal policies, so find out why now is the perfect opportunity for you to enjoy the benefits of reduced tax rates and full global tax exemptions in Portugal.
Personal Income Tax (IRS) rates vary in Portugal depending on annual income; however, under the NHR regime, only a 20% flat rate is paid on personal income tax.
Annual Income | NHR Rate (%) | General Rate (%) |
Up to €7,112 | 20 | 15 |
€7,113 - €10,732 | 20 | 23 |
€10,733 - €20,322 | 20 | 29 |
€20,323 - €25,075 | 20 | 35 |
€25,076 - €39,967 | 20 | 37 |
€39,968 - €80,882 | 20 | 45 |
€80 | 20 | 48 |
Freelance or regularly employed people applying for NHR status can qualify for this flat tax rate with jobs related to scientific, artistic or technical activities which are classified as "high value". Jobs generally considered "high value" are the following:
Scientific
Artistic
Technical
Highly-skilled professionals
Senior management in multinational companies
IT professionals
Researchers
University professors
Engineers
Archeologists
Architects
Doctors
Dentists
Lawyers
Accountants
Auditors and tax consultants
Geologists
Please note that this is not a comprehensive list and other highly-skilled professionals may also be eligible for the NHR program.
Global income under the NHR program also receives different tax treatment, with no tax being paid on employment income, real estate and rental income, capital gains, dividends, interest or royalties from outside of Portugal. These will be paid in the source country if there is a Double Taxation Agreement (DTA) with Portugal. Many countries have DTA's with Portugal, such as the USA and the UK.
For those with pensions who don't qualify under a DTA in Portugal, pension tax is paid like personal income tax with rates of up to 48%; however, with NHR status, only a flat tax rate of 10% is applied, which includes retirement savings and insurances. You will also not pay inheritance or wealth tax.
Do I Qualify for the NHR Tax Regime?
Let RELO.PT help with the specifics of getting this right. Generally there are three main eligibility requirements:
You have not been a tax resident in Portugal for the five (5) years prior to your application.
You need to become an official tax resident in Portugal by spending 183 days or more in Portugal.
You must legally be allowed to reside in Portugal with an applicable long-term visa.
For people wishing to take advantage of the 20% flat tax rate on personal income, your job must be of a qualifying "high value" activity according to the most updated list.
What Steps Do I Have to Follow?
Obtain your NIF
Get a residency visa
Register as a tax resident
Apply for NHR status
Does Brexit Affect NHR if I'm from the UK?
Citizens of the UK can still access the benefits of the Non-Habitual Resident (NHR) tax regime in Portugal, even after Brexit. However, some of the steps have changed, which means that UK nationals must first apply for an appropriate residency visa and not have been registered as a tax resident in Portugal within the last five (5) years. Once your legal residency in Portugal has been obtained, you can apply for your tax identification number (NIF) to become a tax resident. After doing this you are then ready to apply for your NHR status.
I Want to Get Started!
Contact us at RELO.PT to take advantage of this great tax program and make your new life in Portugal even better. We'll lead you through all the required steps specific to you for a stress-free experience in the least amount of time.