Portugal’s original Non-Habitual Resident regime closed to new applicants on 1 January 2024, following the 2024 State Budget Law. A transitional window remained open until 31 March 2025 for those who met specific conditions set before the closure.
If you are considering a move to Portugal now, the regime that may apply to you is IFICI, the Tax Incentive for Scientific Research and Innovation, also known as NHR 2.0, which took effect on the same date, 1 January 2024.
IFICI offers a flat 20 percent tax rate on eligible Portuguese-source income for qualifying new residents, along with exemptions on much of your foreign-source income, for a period of up to ten years.
It does not extend the same treatment to everyone the original regime once covered. Retirees and those relying primarily on passive income no longer receive the tax benefits associated with the old NHR regime.
The original NHR program was introduced in 2009 to attract foreign residents to Portugal through reduced tax rates and exemptions on qualifying income. Over its lifetime, it became one of the most widely used residency-linked tax regimes in Europe.
Its replacement reflects a narrower policy focus. Where NHR was broadly accessible to a wide range of newcomers, IFICI is directed at professionals working in specific high-value sectors, and it requires you to meet defined academic and professional criteria to qualify.
NHR Portugal Tax Regime: Key Takeaways
What is the NHR Portugal tax regime?
The NHR Portugal tax regime refers to the Non-Habitual Resident program that Portugal introduced in 2009 and closed to new applicants in 2023, following a transitional period that ended in 2025.
Under the NHR, qualifying individuals received reduced tax rates and exemptions on a broad range of income for up to ten years.
The regime applied a flat 20 percent rate to certain Portuguese-source income earned in designated high-value professions and, in many cases, exempted foreign-source income from Portuguese tax entirely, depending on the terms of Portugal’s double taxation agreements with the relevant country.
Its reach extended to retirees, investors, and a wide range of professional categories, which is part of why it became one of the most widely used residency-linked tax incentives in Europe.
The Incentivo Fiscal à Investigação Científica e Inovação, or IFICI, works differently. It preserves the flat 20 percent rate on eligible Portuguese-source income, but restricts eligibility to specific professional activities in sectors Portugal has identified as strategic, including scientific research, technology, and related high-value fields.
Qualifying also requires meeting a defined academic or professional threshold: Either an EQF Level 6 qualification, broadly equivalent to a bachelor’s degree, combined with three years of relevant professional experience, or an EQF Level 8 qualification, meaning a PhD, which removes the experience requirement.
Is the NHR Portugal tax regime still available?
No. The original NHR regime closed to new applicants on 1 January 2024 in accordance with the 2024 State Budget Law, with a transitional window open only to those who met specific conditions before that date, running until 31 March 2025.
If you did not qualify or apply within that window, you cannot access the original regime now, regardless of when you plan to move to Portugal.
| Regime | Current status |
|---|---|
| Original NHR | Closed to new applicants since 1 January 2024 |
| IFICI (NHR 2.0) | Open since 1 January 2024 for residents in qualifying professional activities |
| Standard progressive IRS | Applies automatically if you hold NHR status from before closure or do not qualify for IFICI |
For new residents, IFICI has taken the place of NHR, though its scope is narrower. As of March 2026, the Portuguese Tax Authority issued its first wave of IFICI approvals, which indicates that applications are being processed and that the regime is operating in practice rather than existing only in regulation.
This does not mean IFICI functions as a direct substitute for NHR in every respect.
It excludes retirees and passive-income holders from the benefits it offers, so if your income in Portugal would come primarily from a pension or from foreign investments rather than from a qualifying professional activity, you would be taxed under standard progressive rates, not under IFICI.
Benefits of Portugal NHR
The benefits listed below are historical, applied to the original NHR regime, and differ from those of IFICI. If you already hold NHR status, these benefits continue to apply to you for the remainder of your original ten-year period.
| Benefit | What it meant |
|---|---|
| Ten-year special tax treatment | Reduced rates and exemptions applied for a fixed ten-year period from the date NHR status was granted. |
| Exemption on most foreign-source income | Income from outside Portugal was often exempt from Portuguese tax under the terms of the relevant double taxation agreement. |
| 20 percent flat rate on qualifying Portuguese-source income | This applied specifically to income from the high-value professions recognized by the regime. |
| Inheritance and gift tax exemption for direct family members | Transfers to a spouse, children, or parents, were exempt a feature of the broader Portuguese tax environment rather than unique to NHR. |
| No wealth tax | Portugal does not levy a general wealth tax on NHR holders or other residents. |
| Free remittance of funds | NHR holders could transfer funds into Portugal without additional remittance-based tax. |
A key benefit of Portugal’s NHR tax regime lay in Double-Taxation Agreements (DTAs).
Portugal has signed Double-Taxation Agreements with 81 countries, and allowed for most categories of income to be taxed in the country from which the source of income is derived.
Most countries, however, choose not to apply income tax to any income earned by non-residents as they want to be seen as jurisdictions open to foreign investment.
In turn, under the NHR tax regime, Portugal would not tax most foreign-sourced income earned by NHR individuals. This allowed NHR residents to receive foreign income tax-free.
NHR, IFICI, and Standard IRS: How They Compare
Even though NHR no longer exists, here’s how the original NHR regime, the current IFICI regime, and standard Portuguese income tax differ across the factors that matter.
| NHR (closed) | IFICI (current) | Standard IRS | |
|---|---|---|---|
| Availability | Closed to new applicants since 31 March 2025 | Open to new tax residents who meet eligibility criteria | Applies to all Portuguese tax residents by default |
| Eligibility basis | Five-year non-residency requirement broad professional scope | EQF Level 6 with three years of experience or EQF Level 8 plus a qualifying activity in a recognized sector | No eligibility criteria; applies automatically |
| Duration | Ten years from the date the status was granted | Up to ten years, reassessed annually conditional on you continuing to work in a qualifying role | Ongoing for as long as you remain a tax resident |
| Portuguese-source income (qualifying activity) | Flat 20 percent for recognized high-value professions | Flat 20 percent for recognized activities | Progressive rates from 12.5 percent to 48 percent |
| Foreign-source income | Often exempt where a double taxation agreement applied | Most foreign income, such as employment, and self-employment, dividends, interest, and capital gains is exempt. | Taxed at standard progressive rates with relief available under applicable double taxation agreements. |
| Pension income | Flat 10 percent | Not eligible | Taxed at standard progressive rates with the first €4,104 exempt |
| Application deadline | Closed | 15 January of the year following your first year of Portuguese tax residency | Not applicable |
Standard IRS rates for Portuguese tax residents
If your income does not fall under IFICI or a recognized qualifying activity, it is taxed under Portugal’s standard progressive income tax system, known as IRS.
This applies to most residents and serves as the baseline against which IFICI’s flat-rate offers an advantage for those who qualify.
Portugal updated its IRS brackets for 2026, raising the threshold of each band and reducing the marginal rate on the second through fifth brackets, so the figures below reflect the current year rather than the previous one.
| Taxable income | Rate | Deduction |
|---|---|---|
| up to €8,342 | 12.50% | €0.00 |
| €8,342.01-€12,587 | 15.70% | €266.94 |
| €12,587.01-€17,838 | 21.20% | €959.26 |
| €17,838.01-€23,089 | 24.10% | €1,476.45 |
| €23,089.01-€29,397 | 31.10% | €3,092.77 |
| €29,397.01-€43,090 | 34.90% | €4,209.94 |
| €43,090.01-€46,566 | 43.10% | €7,743.27 |
| €46,566.01-€86,634 | 44.60% | €8,441.48 |
| Above €86,634.00 | 48% | €11,387.17 |
Residents with taxable income above €80,000 are also subject to an additional solidarity surcharge, at 2.5 percent on income between €80,000 and €250,000, and 5 percent above that threshold.
This applies regardless of whether you hold IFICI status, since the surcharge sits outside the flat rate and affects only income that falls under standard progressive taxation.
Who can apply for the NHR Portugal tax regime?
The original NHR regime is closed, and you can’t apply for it. However, you could have qualified for NHR under the transitional rules if, by 31 December 2023, you:
- Had registered tax residency in Portugal without yet applying
- Signed a work or business contract while moving to Portugal in 2024
- Concluded a property purchase agreement
- Carried out public functions for the Portuguese government abroad within the prior 12 months
- Served as a crew member on a Portuguese-registered ship or aircraft.
To apply for IFICI, you need to meet an academic or professional threshold before anything else is considered.
This means holding an EQF Level 6 qualification, broadly equivalent to a bachelor’s degree, combined with three years of relevant professional experience, or an EQF Level 8 qualification, which removes the experience requirement.
| Recognized activity category | Who this applies to |
|---|---|
| Teaching and scientific research | Higher education teaching staff and scientific researchers |
| Highly qualified professionals | Individuals in qualified positions as defined under the tax code, and members of corporate bodies within contractual benefits for productive investment |
| Employees of recognized strategic companies | Staff at companies recognized by AICEP, IAPMEI, or similar bodies as relevant to the national economy |
| Research and development personnel | Individuals meeting the tax code’s R&D definitions |
| Certified startup employees | Staff at businesses certified by law as startups |
| Madeira and Azores workers | Individuals meeting the specific terms set by those regions |
You must also become a Portuguese tax resident for the first time in the previous five years, and you must earn income from one of the regime’s recognized activities.
Tax Under the Non-Habitual Resident Regime in Portugal
The tax treatment explained below applied specifically to the original NHR regime and no longer applies to new applicants. If you already hold NHR status, this reflects the rules that continue to govern your remaining years under the regime.
Tax treatment of foreign-source income under the original NHR regime
Under the original NHR regime, foreign-source income was largely exempt from Portuguese taxation where a double taxation agreement applied, meaning the income was instead taxed in its country of origin.
| Income type | Treatment under NHR |
|---|---|
| Employment income | Taxed at a flat 20 percent if it fell under a recognized high-value profession |
| Self-employment income | Taxed at a flat 20 percent if it fell under a recognized high-value profession; also subject to social security contributions after an initial one-year exemption |
| Royalties dividends and interest | Typically exempt where a double taxation agreement applied; taxed at 28 percent where no exemption applied, or 35 percent if the income originated in a blacklisted jurisdiction |
| Real estate income | Typically taxed at source in the country where the property is located |
| Capital gains from securities | Taxed at 28 percent |
| Pension income | Taxed at a flat 10, percent a rate in effect since March 2020 |
Tax treatment of Portugal-source income under the original NHR regime
Income earned within Portugal under the original NHR regime followed a different set of rules from foreign-source income.
Employment and self-employment income was taxed at standard progressive rates unless it fell under a recognized high-value profession, in which case the flat 20 percent rate applied. Rental income, capital gains, and pension income each followed its own treatment, set out below.
| Income type | Treatment under NHR |
|---|---|
| Employment and self-employment income | Standard progressive rates applied unless the activity fell under a recognized high-value profession in which case a flat 20 percent applied |
| Rental income | Taxed at an optional 28 percent or at standard progressive rates |
| Net capital gains | Fifty percent of the gain was subject to standard progressive rates |
| Pension income | Taxed at the standard 10 percent rate |
The professions the original regime recognized as high-value included:
- general directors and executive managers,
- directors of administrative, commercial, and specialized services,
- specialists in physical sciences, mathematics, and engineering,
- university and higher education professors,
- information and communication technology specialists,
- authors, journalists, and linguists,
- performing and creative arts professionals,
- science and engineering technicians,
- market-oriented agricultural and forestry workers,
- and skilled industrial and craft workers meeting a minimum qualification or five years of professional experience.
How to Apply for IFICI
Applying for IFICI begins with establishing Portuguese tax residency, which you do by spending more than 183 days in Portugal within a 12-month period, or by maintaining a habitual residence there that demonstrates your intent to stay long-term.
Once you meet this threshold, you register with the Portuguese Tax Authority, obtain a Portuguese tax identification number, known as an NIF, and update your tax address to reflect your Portuguese residence.
With these steps complete, you submit your formal application, and it must reach the Portal das Finanças by 15 January of the year following the year you became a Portuguese tax resident.
It is also worth understanding that IFICI approval is not a one-time event. Your eligibility is reassessed annually for as long as you hold the status, which means the qualifying activity that supported your original application must remain in place or be replaced within the regime’s continuity allowance throughout your participation in the regime.
Step 1: Become a Portuguese tax resident by spending more than 183 days in Portugal within a 12-month period, or maintain a habitual residence in Portugal that shows intent to stay long-term.
Step 2: Register with the Portuguese Tax Authorities (AT).
Step 3: Obtain a tax identification number in Portugal (NIF).
Step 4: Update your tax address to your Portuguese residence
Step 5: Once you’re a resident, registered, and have an NIF, submit a formal request through the Portal das Finanças (Portugal’s tax portal).
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