The non-habitual tax regime in Portugal aims to attract investors and professionals of high cultural and economic worth, in order to increase the country’s international competitiveness. The regime was first implemented in 2009 and can allow substantial tax savings for those who qualify. The scheme has been highly successful and as a result, there are now over 10,000 non-habitual tax regime residents in Portugal.
There are many advantages to being a non-habitual tax resident in Portugal:
An important 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 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 for 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.
See below for the list of countries with DTAs with Portugal.
In order to qualify for the NHR regime, applicants must fulfill the following requirements:
AND
To maintain a residency status in Portugal, the individual must
Non-EU/EEA/Swiss citizens who wish to apply for the NHR regime in Portugal may want to take advantage of 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 in Portugal. As specialists in investment and residency programs, we can provide you with personalized advice which will help you make the best possible decision.
Click here to book a initial consultation. We guarantee complete and total privacy.
In order to establish tax residency in Portugal, applicants for the NHR scheme must hold a dwelling in Portugal at the 31st of December of that year with the intent to hold habitual residence.
The NHR regime does not require its beneficiaries to purchase property in Portugal.
To comply with the requirements of the regime, applicants must have a domicile in Portugal available to them. This must be a place that demonstrates the intention to hold and occupy 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.
If you decide to rent a property, you will need to provide proof of a lease or loan agreement. If you have bought a property, you can provide a purchase deed instead.
Professions of high cultural and economic worth are given generous tax exemptions under the NHR regime, as they are considered to be of added value to Portugal.
The following professions are considered of high added value:
| Architects | Engineers | Geologists |
| Theater, ballet, cinema, radio, television artists | Singers | Sculptors |
| Musicians | Painters | Auditors |
| Tax consultants | Dentists | Medical Analysts |
| Clinical surgeons | Ship’s doctors | General Practitioners |
| Dentists | Medical physiatrists | Doctors |
| University lecturers | Psychologists | Archaeologists |
| 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 |
| Designers | Investors | Managers |
| Directors | Higher management |
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 which has a double taxation treaty with Portugal, this means the income will not be taxed in Portugal.
| INCOME (€) | TAX RATES (%) | BAND (€) | TAX ON BAND (€) | CUMULATIVE TAX (€) |
|---|---|---|---|---|
| 0 – 7,091 | 14.5 | 7,091 | 1,028 | 1,028 |
| 7,092 – 10,700 | 23 | 3,608 | 830 | 1,858 |
| 10,702 – 20,261 | 28.5 | 9,561 | 2,725 | 4,583 |
| 20,262 – 25,000 | 35 | 4,738 | 1,658 | 6,241 |
| 25,001 – 36,856 | 37 | 11,655 | 4,386 | 10,627 |
| 36,857 – 80,640 | 45 | 43,783 | 19,702 | 30,329 |
| Over 80,640 | 48 | – | – | – |
In order to register for the NHR regime in Portugal, applicants must be registered as a Portuguese resident and tax resident.
NHR regime applicants must have proof of a habitual abode by December 31. The NHR application then has to be made before March 31.
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 10 years, retroactively effective from the date on which the applicant became resident.
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 citizens
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 with you:
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 €16.
Non-EU citizens
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 Passive Income.
Each process must be done either through “Serviço de Estrangeiros e Fronteiras” (SEF) or in a Portuguese embassy in your country of origin.
Take a look at our Golden Visa guide for more information.
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.
Everyone who intends to reside or do business in Portugal must have a NIF (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, though if you are already in Portugal, you can go to your local government finance office (finanças). To get a NIF at a finanças in Portugal you will need proof of residence (such as a utility bill or rental contract), and your residency certificate or visa, as well as your passport.
After you have your NIF, you must register as a tax resident in Portugal. This can also be done at finanças.
If you choose to apply for the NHR on your own, the easiest way is online through the government’s financial portal. To use the online service, you must first register to the website.
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:
One of the main reasons for which NHR applications are rejected is that not enough supporting evidence has been provided. It may be required for you to verify that you have not been a tax resident in Portugal within the past 5 years. This means submitting further evidence to prove that you have been a tax resident in another country.
Click here to book a initial consultation. We guarantee complete and total privacy.
With uncertainty over the direction of Brexit, it is difficult to know how the NHR regime in Portugal might change for British citizens. Portugal has a double tax agreement with the UK, which means that taxation for British citizens will remain the same under the NHR regime. Issues may arise in regards to residency, however, those who have already secured a residency in Portugal are likely to be protected. The Portuguese government has indicated that British citizens registered as living in Portugal will retain all of their current rights even after Brexit.
British citizens who are considering applying for the NHR regime in Portugal might wish to consider doing so before Brexit comes into effect.
If your income is paid in a country which has a double taxation agreement with Portugal, you will be exempt from paying any tax in Portugal.
Depending on your profession or source of income, you could still be eligible for significant tax breaks.
If you are registered online at the Portal das Finanças, you can track the progress of your application.
You can consult the status of your application through the finanças portal, through Aceda aos Serviços Tributários, clicking on Consultar Pedido and then Inscrição Residente Não Habitual.
You should know with a couple of weeks whether your application has been accepted or declined.
No, but you need to maintain a permanent residence in the country, either through purchasing property or by renting a home.
No, you will only have to state your income on your tax returns.
The scheme has been in place since 2009 and is growing increasingly more popular every year.
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.
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.
You must apply for the NHR regime before March 31 of the tax year during which you became a tax resident in Portugal.
There are already at least 10,000 non-habitual residents in Portugal, and the number of applicants is steadily growing each year.
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%.
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.
Taxes on a property purchase in Portugal vary depending on circumstance. There are three main taxes on property:
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.
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.
Rental income, investment income, and capital gains are not taxed in Portugal if they come from a foreign source.
It is unlikely that any existing double tax treaties between Portugal and other countries will be summarily 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 tax treaties with Portugal, and it is unlikely that amendments will substantially affect the NHR regime.
There are many complexities to the interactions between Portuguese and home tax law. Solutions can vary significantly from one case to another, and there is ultimately to substitute for advice tailored to your specific circumstances.
The following countries have double taxation treaties with Portugal:
| ?? Algeria | ?? Austria | ?? Andorra |
| ?? Bahrain | ?? Barbados | ?? Belgium |
| ?? Brazil | ?? Bulgaria | ?? Canada |
| ?? Cape Verde | ?? Chile | ?? China |
| ?? Colombia | ?? Croatia | ?? Cuba |
| ?? Cyprus | ?? Czech Republic | ?? Denmark |
| ?? East-Timor | ?? Estonia | ?? Ethiopia |
| ?? Finland | ?? France | ?? Germany |
| ?? Georgia | ?? Greece | ?? Guinea-Bissau |
| ?? Hong Kong | ?? Hungary | ?? Iceland |
| ?? India | ?? Indonesia | ?? Ireland |
| ?? Israel | ?? Italy | ?? Ivory Coast |
| ?? Japan | ?? Kuwait | ?? Latvia |
| ?? Lithuania | ?? Luxembourg | ?? Macau |
| ?? Malta | ?? Mexico | ?? Moldova |
| ?? Montenegro | ?? Morocco | ?? Mozambique |
| ?? Netherlands | ?? Norway | ?? Oman |
| ?? Pakistan | ?? Panama | ?? Peru |
| ?? Poland | ?? Romania | ?? Russia |
| ?? San Marino | ?? São Tomé and Principe | ?? Saudi Arabia |
| ?? Senegal | ?? Singapore | ?? Slovakia |
| ?? Slovenia | ?? South Africa | ?? South Korea |
| ?? Spain | ?? Qatar | ?? Sweden |
| ?? Switzerland | ?? Tunisia | ?? Turkey |
| ?? United Arab Emirates | ?? United States of America | ?? United Kingdom |
| ?? Ukraine | ?? Uruguay | ?? Venezuela |
| ?? Vietnam |
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.
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.
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 5 years prior to your application, and have a residence in Portugal that you intend to keep and occupy as a habitual home.
Freelancers, pensioners, business owners and other professionals of high cultural or economic worth can apply for the non-habitual tax regime in Portugal.
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.