Portugal’s NHR (non-habitual resident) tax regime is hugely successful. If you’re considering relocating to Portugal for the sunny weather, stunning landscapes, and seafood delights – you’ll be glad to know that it’s also a smart financial decision.
The NHR tax regime offers tax exemptions and low tax rates for ten years. This article reviews the benefits of the non-habitual resident tax regime, its requirements, tax rates, and important dates.
What is Portugal’s NHR tax regime?
Portugal’s non-habitual resident tax regime aims to attract investors and professionals who could contribute to Portugal’s economy and culture. This special tax status for new residents can lead to tax exemptions on a global income and income earned in Portugal being taxed at a flat rate of 20 percent.
NHR status allows substantial tax savings. Introduced in 2009, the scheme was implemented to increase Portugal’s global competitiveness by attracting professionals of high cultural and economic worth.
Foreign investors with a Golden Visa can optimize their taxes by applying for NHR status. Digital nomads or individuals on the Tech Visa who aim to spend over 183 days a year in Portugal can also apply.
Why become a non-habitual tax resident in Portugal?
TAX RESIDENCY IN WHITE-LISTED EU COUNTRY
SPECIAL TAX TREATMENT FOR 10 YEARS
NO WEALTH TAX
FREE REMITTANCE OF FUNDS TO PORTUGAL
EXEMPTION ON ALL FOREIGN INCOME
20 PERCENT FLAT RATE ON SOME PORTUGUESE INCOME
TAX EXEMPTION ON GIFTS FOR FAMILY MEMBERS
NO MINIMUM STAY REQUIREMENT
Some of the significant advantages to applying for NHR status:
- You can benefit from special personal income tax treatment over ten years
- You can enjoy the tax exemption on almost all foreign source income
- 20 percent flat rate for certain Portuguese source incomes (from specific professions and self-employment), as opposed to national Portuguese income tax rates of up to 48 percent
- No minimum stay requirement
- Become part of a white-listed tax environment within the EU
- A tax exemption for gifts or inheritance to direct family members
- No wealth tax
- Free remittance of funds to Portugal
Portugal NHR and double taxation agreements
A key feature of Portugal’s non-habitual resident tax regime lies in its relationship with Double-Taxation Agreements (DTAs).
DTAs allow for most categories of income to be taxed in the country of the source of income. Most countries, however, choose not to tax income earned by non-residents as they want to be seen as jurisdictions open for foreign investment.
In turn, under the NHR tax regime, Portugal will not tax most foreign source income earned by NHR individuals because the income may be taxed abroad. This allows NHR residents to receive foreign income completely free of tax.
Portugal currently has signed Double-Taxation Agreements with 79 countries, and the OECD model tax convention may be used in the absence of a DTA.
Who can apply for the non-habitual resident tax regime in Portugal?
In order to qualify for the NHR regime, applicants must fulfill the following requirements:
- Have the right to reside in Portugal either by being an EU/EEA/Swiss citizen or through schemes such as the Golden Visa program.
- Not have been a Portuguese tax resident in the five years before residence in Portugal.
To maintain a residency status in Portugal, the individual must:
- Have a place of abode in Portugal on 31 December of that year. This home must be available in a way that may lead to the supposition of an intention to keep and occupy it as a habitual home.
NHR Portugal minimum stay
In order to avail of NHR status, you must stay for a minimum of 183 days in the country per year or maintain a property as your habitual residence.
NHR Portugal, what happens after ten years?
After ten years, you lose your NHR status and tax benefits and are liable to be taxed at standard Portuguese rates.
NHR and the Golden Visa
Non-EU/EEA/Swiss citizens who wish to apply for the NHR regime in Portugal may do so through Portugal’s Golden Visa program. Investors who first acquire residency through the Golden Visa program can then become eligible for the NHR regime in Portugal.
Find out more about the Golden Visa program here.
Global Citizen Solutions can help you take the next step towards investing and securing residency rights in Portugal. As investment and residency program specialists, we can provide personalized advice to help you make the best possible decision.
Tax residency requirements for the Portuguese non-habitual resident regime
In order to establish tax residency in Portugal, applicants for the NHR scheme must have a place of residence in Portugal on 31 December of that year with the intent to hold habitual residence.
Do I have to buy or rent property to prove residency in Portugal?
The NHR regime does not require its beneficiaries to purchase property in Portugal. To comply with the regime’s requirements, applicants must have a domicile in Portugal available to them. This must be a place that demonstrates the intention to hold and occupy the space as a habitual place of residence.
It can, therefore, be beneficial for NHR tax residents to buy property in Portugal; however, a rental contract for 12 months is also sufficient proof of residence.
What documentation is required to prove residency?
If you decide to rent a property, you must provide proof of a lease or loan agreement. You can provide a purchase deed instead if you have bought a property.
Tax Under the Non-Habitual Resident Regime in Portugal
Which professions are considered to be of high value under the NHR tax regime?
Professions of high cultural and economic worth are given generous tax exemptions under the NHR regime.
The following professions are considered of high added value:
|Theater, ballet, cinema, radio, television artists||Singers||Sculptors|
|Tax consultants||Dentists||Medical Analysts|
|Clinical surgeons||Ship’s doctors||General Practitioners|
|Biologists and life science experts||Computer programmers||Software consultant|
|Computer consultants and related services||News agencies||Other information and service activities|
|Scientific research and development||Research and experimental development on natural sciences and engineering||Research and development in biotechnology|
Tax treatment of foreign source income under the NHR regime
Beneficiaries of the NHR regime in Portugal with a foreign income are largely exempt from taxation in Portugal due to DTAs.
If income is sourced in a country with a double taxation treaty with Portugal, the income will not be taxed in Portugal.
- Foreign source income is tax-exempt under the NHR regime or taxed at a flat rate of 20 percent if it falls under the list of eligible professions.
- Taxed at regular progressive rates unless it comes under the eligible profession categorization
- This income is also subject to social security contributions unless the individual in question already pays into another social security system.
- Optionally taxed at a flat rate of 20 percent — but the taxpayer can choose to pay the usual progressive rates
- Tax-exempt if it is from an eligible profession and comes from a country with a DTA or in the absence of a treaty under the OECD model tax convention (provided the country is not a tax haven)
Royalties and income from financial assets
- Tax-exempt if the income comes from a country with a DTA
- Tax-exempt if the income originates from a country without a DTA but which isn’t a blacklisted tax haven
- Otherwise taxed at 28 percent or 35 percent if the country is a blacklisted tax haven
Real estate income and capital gains
- Tax-exempt if from a country with a DTA
- Tax-exempt if from a country without a DTA but which isn’t a blacklisted tax haven
Capital gains from the disposal of securities (shares, bonds, etc.)
- Subject to an optional rate of 28 percent or 35 percent if from a blacklisted tax haven
- Taxed at a flat rate of 10 percent (since March 2020)
Tax treatment of Portuguese source income under the NHR regime
- Usual progressive tax rates apply if employment does not fall under the list of eligible professions.
- If employment falls under eligible NHR professions, an optional tax rate of 20 percent is applicable.
- Usual progressive tax rates apply if employment does not fall under the list of eligible professions.
- If employment falls under eligible NHR professions, an optional tax rate of 20 percent is applicable, although usual progressive tax rates can also be applied.
Real estate income and capital gains
- Rental income is taxed at an optional rate of 28 percent or otherwise at standard progressive rates.
- Net capital gains are taxed at 50 percent at standard progressive rates.
- Taxed at usual rates (10 percent)
Portuguese tax table for 2023
|INCOME (€)||TAX RATES (%)|
|0 – 7,479||14.5|
|7,479 – 11,284||21|
|11,284 – 15,992||26.5|
|15,992 – 20,700||28.5|
|20,700 – 26,355||35|
|26,355 – 38,632||37|
|38,632 – 50,483||43.5|
|50,483 – 78,834||45.0|
Timeline and Important Dates for NHR application
In order to register for the NHR regime in Portugal, applicants must be registered as a Portuguese resident and tax resident.
NHR applicants must have proof of a habitual abode by 31 December. The NHR application then has to be made before 31 March. It usually takes about two weeks for an application for the NHR regime to be accepted or declined.
NHR status is granted for a period of ten years, retroactively effective from the date on which the applicant became a resident.
Step-by-Step Application Guide: Non-Habitual Resident Tax Regime in Portugal
Step 1 – Proof of residency
The first step towards applying for the non-habitual resident regime in Portugal is securing residency status in the country. To do so, you must have the legal right to reside in Portugal.
EU/EEA/Swiss are allowed to register for residency without a visa. All that is needed to register citizens can register for residency at their local town hall (Sítio da Câmara). Be sure to take the following with you:
- EHIC card
- You will need to give a current address, but will not require proof of residency
At the town hall, you will need to find the correct ticket to register as a “Cidadão Europeu”. The process is fairly straightforward, and the attendant should fill out the form for you. You will then have to pay a fee of around €15.
Non-EU citizens who wish to apply for the NHR regime must first obtain a residence permit to be allowed to settle in Portugal. This can be granted through a number of different methods, but the most common is through the Golden Visa or through the Portugal D7 Visa program.
The process takes place through the “Serviço de Estrangeiros e Fronteiras” (SEF) or at your closest Portuguese Embassy or Consulate.
Take a look at our Golden Visa guide for more information.
Step 2 – Find a specialist accountant for professional advice
The safest way to apply for NHR status in Portugal is with the help of a specialist. This way you can ensure that you have the best understanding of Portuguese tax law and find the best solution for your needs. However, should you wish to apply on your own, you can follow the steps below.
Step 3 – Obtain a Portuguese tax number (NIF)
Everyone who intends to reside or do business in Portugal must have a tax identification number (NIF) in Portugal (Numero de Identificação Fiscal). This is a 9-digit number that serves as an identification for tax purposes.
There are a number of different ways to acquire a NIF. If you are already in Portugal, you can go to your local government finance office (finanças). To get a NIF at a finanças you will need proof of residence (such as a utility bill or rental contract), your residency certificate or visa, and your passport.
Step 4 – Register as a tax resident in Portugal
After you have your NIF, you must register as a tax resident in Portugal. This can also be done at finanças.
Step 5 – Apply for your NHR Status
To do this you will need your NIF, your fiscal address, email address, and phone number. These should be all of the same details which you initially used to register for your NIF. You will also be asked to provide a secret question and answer.
Once you have registered, a password will be sent to you by post. It should take at most two weeks to arrive.
When your password arrives, you can log into the finanças portal and register your application for the NHR regime. You can do this by accessing Aceda aos Serviços Tributários, clicking on Entregar Pedido, and then finally Inscrição Residente Não Habitual.
To complete your application you will be required to submit the following documents:
- A declaration stating that you have not been a tax resident in Portugal for the previous 5 years
- Tax returns for the past 5 years
- Proof of purchase of property in Portugal or a rental contract
Request for further evidence
The most common reason behind NHR rejections is a failure to provide enough supporting evidence. You might be required to prove that you have not been a tax resident in Portugal within the past five years. This means submitting further evidence proving that you have been a tax resident in another country.
NHR Regime for US Citizens
US citizens can certainly apply for the scheme. Anyone who meets the requirements can request NHR status. You must live abroad, not have been a resident in Portugal within the last five years, and want to move to Portugal. To be considered a resident, you must remain in the country for 183 days a year or have your primary home there.
NHR Regime for UK Citizens
Following the UK’s departure from the EU, it’s become slightly more complicated for UK citizens to obtain NHR status. We’d recommend that UK citizens apply for a D7 Visa or Golden Visa. Upon securing an appropriate visa, the steps to NHR status are the same as outlined above.
FAQs about Portugal's NHR Tax Regime
What if my income is paid in another country?
If you’re being taxed by a country that has a double taxation agreement with Portugal, you will be exempt from paying any tax in Portugal.
What if my income is earned in Portugal?
Depending on your profession or source of income, you could still be eligible for significant tax breaks. That being said, if your income is being earned in Portugal, you’re more than likely liable to pay Portuguese taxes.
Can applications for non-habitual residency in Portugal be tracked?
If you are registered online at the Portal das Finanças, you can track the progress of your application.
How do you know if registration as a Portuguese non-habitual resident has been accepted?
You can consult the status of your application through the finanças portal . Click Aceda aos Serviços Tributários, then Consultar Pedido, and then finally Inscrição Residente Não Habitual.
How long does it take to apply for the NHR tax regime in Portugal?
You should know within a couple of weeks whether your application has been accepted or declined.
Generally, it takes about two weeks to hear back.
Do I have to be resident outside of Portugal to be a non-habitual tax resident?
No, but you need to maintain a permanent residence in the country, either by purchasing property or by renting a home.
Do I have to make a statement of assets to apply for the NHR regime?
No, you will only have to state your income on your tax returns.
How long has the NHR regime in Portugal been available?
The scheme has been in place since 2009 and is growing increasingly more popular every year.
Will the NHR regime in Portugal change in the foreseeable future?
Many consider the NHR regime in Portugal to be a valuable way to draw professionals and investors to Portugal, and as a result, it is unlikely that the scheme will change in the near future.
Is it possible to backdate my registration as a non-habitual tax resident?
Once your application is successful, your status as a non-habitual tax resident will automatically be backdated to when you first registered as a tax resident in Portugal.
When is the best time to apply for the Portuguese NHR tax regime?
You must apply for the NHR regime before March 31 of the tax year during which you became a tax resident in Portugal.
How popular is the non-habitual resident regime in Portugal?
There are already at least 10,000 non-habitual residents in Portugal, and the number of applicants is steadily growing each year.
Does Portugal have any kind of wealth tax?
There is no wealth tax in Portugal, but in 2017 the country introduced an extension of the existing property tax, the Imposto Municipal Sobre Imóveis (IMI). This annual tax is paid only on Portuguese properties, regardless of the country of residence of the owner.
The tax is calculated by property value, on properties in excess of €600,000. Married couples and civil partners (unido de factos) have a combined allowance of €1,200,000. The tax rate varies between 0.4%, 0.7% and 1.0%.
What is the Portuguese law in regard to civil partnerships?
In Portugal civil partnerships and marriage are treated with equal weight.
Under Portuguese law, a couple in a civil partnership is treated the same as married partners for tax purposes.
What taxes must be paid when buying property in Portugal?
Taxes on a property purchase in Portugal vary depending on circumstance. There are three main taxes on property:
- Municipal property tax (IMI)
- Real estate transfer tax (IMT)
- Stamp duty (IS)
Is there inheritance tax in Portugal?
Spouses, direct descendants and ascendants are exempt from any type of inheritance tax in Portugal. For everyone else, there is a 10% stamp duty on Portuguese assets.
Is there a gift tax in Portugal?
As with inheritance tax, spouses, direct descendants and ascendants are exempt from gift tax in Portugal. There is a 10% stamp duty on Portuguese assets for all others, and an additional rate of 0.8% on real estate.
Is foreign source rental income, investment income, and capital gains taxed in Portugal?
Rental income, investment income, and capital gains are not taxed in Portugal if they come from a foreign source.
How might the re-negotiation of double tax treaties between my country of residence and my country of income affect the NHR regime in Portugal?
It is unlikely that any existing double tax treaties between Portugal and other countries will be terminated.
There have however been cases in which agreements have been amended, as is the case with Finland and Sweden.
No other countries have signaled intentions to change double taxation treaties with Portugal, and it is unlikely that amendments will substantially affect the NHR regime.
What is the non-habitual resident tax regime in Portugal?
Portugal’s non-habitual resident tax regime aims to attract investors and professionals of high cultural and economic worth. The regime allows for substantial tax savings for those who qualify.
What are the requirements for the non-habitual resident tax regime?
In order to apply for the non-habitual resident regime, you must have the right to reside in Portugal. You must also not have been a Portuguese tax resident in the five years prior to your application, and have a residence in Portugal that you intend to keep and occupy as a habitual home.
How do I apply for the Portugal NHR?
You will need all of the necessary documents to prove residency, as well as a Portuguese tax number. You can then apply to be a tax resident in Portugal, and then make an application for NHR status.
Who can apply for the non-habitual tax regime in Portugal?
Freelancers, pensioners, business owners and other professionals of high cultural or economic worth can apply for the non-habitual tax regime in Portugal.
Which countries have double taxation treaties with Portugal?
The following countries have double taxation treaties with Portugal:
|San Marino||São Tomé and Principe||Saudi Arabia|
|Slovenia||South Africa||South Korea|
|United Arab Emirates||United States of America||United Kingdom|
DISCLAIMER: This guide on Portugal’s non-habitual resident tax regime is not intended as a substitute for legal advice. Whilst we take care to ensure that all our information is correct and up-to-date, it is important to always rely on professional advice or the relevant legislation when considering your particular circumstances.
Global Citizen Solutions provides specialist advice for investment and residency in Portugal.
Get in touch to receive personalized advice on your options.
We also provide specific country pages, where you can see an overview of the country – see an example here of the United Arab Emirates.
Who qualifies for NHR in Portugal?
To qualify for NHR, you must live overseas, not have been a resident in Portugal within the last five years and want to reside in Portugal. To be considered a resident, you must remain in Portugal for 183 days a year or have your primary home there.