What is the Non-Habitual Resident tax status in Portugal?
The NHR scheme helps foreigners to alleviate their tax burden in Portugal. The preferential tax status is issued for ten years without the possibility of renewing it.
The conditions for the tax regime registering and operating for holders of NHR Portugal status are enshrined in Legislative Decree No. 249 of September 23rd, 2009.
The Portugal NHR program has been operating since 2009 and allows paying fewer taxes. To apply for NHR status, you need to get a Portuguese residence permit and stay in the country for 183 days a year. In that case, you can change your tax residency.
Individuals can obtain a residence permit in different ways: apply for a job in a Portuguese company, enrol in a Portuguese university or marry a Portuguese citizen.
Under the Portugal Golden Visa Program, wealthy people can also obtain a residence permit by investing in the Portuguese economy. The program offers five investment options, including purchasing an investment fund unit.
Financially independent people can get residence permits through D7 visas. The D8 visa is available to digital nomads wishing to relocate to Portugal.
Holders of Portugal residence permits have the right to live, work, conduct business and study in the country without restrictions.
Benefits of the NHR in Portugal
The fixed tax rate on income from employment. In a standard situation, the income tax is levied on a progressive scale. The rate can be up to 48% and depends on the yearly income:
- 14.5% — on an income of up to €7,112;
- 23% — on the income of €7,112 to 10,732;
- 28.5% — on the income of €10,732 to 20,322;
- 35% — on the income of €20,322 to 25,075;
- 37% — on the income of €25,075 to 36,967;
- 48% — on the income of €36,967 to 80,882;
- 48% plus an additional tax of 2.5% — on the the income of €80,882 to 250,000;
- 48% plus an additional tax of 5% — on the income of over €250,000.
Highly qualified professionals who receive salaries from Portuguese companies or work in Portugal as self-employed can pay income tax at a flat rate of 20%.
The flat tax rate for pensions from other countries is 10%. The rule applies if the recipient changed his tax residence to Portuguese and received Non-Habitual Resident status after April 1st, 2020.
Tax residents of Portugal without Non-Habitual Resident status pay pension tax as income tax: on a progressive scale with a rate of up to 48%.
No taxes on gifts, inheritance and wealth are paid by non-habitual residents in Portugal.
Foreign-sourced income. The holder of the Non-Habitual Resident status does not pay tax in Portugal on dividends, interest and royalties, capital gains, rental income from real estate outside Portugal, or income from employment in another country.
The income must be received from foreign companies and funds. You do not need to pay dividends and interest tax only if the income is received from a country that is not an offshore jurisdiction.
The standard global income tax rates in Portugal are the following:
- 28% on dividends, interest and royalties;
- 28% on capital gains;
- 28% on rental income;
- Up to 48% on labour income.
The global income and retirement benefits are tax-exempt in Portugal if taxes are paid in the source country. A Double Taxation Agreement (DTA) or a model convention of the Organisation for Economic Cooperation and Development on income taxation must be concluded between Portugal and such a country.
Portugal DTA country list
| Algeria | Cabo Verde | Germany | Kuwait | Oman | Sweden |
| Andorra | Canada | Greece | Luxembourg | Panama | Switzerland |
| Angola | Chilli | Guinea‑Bissau | Latvia | Pakistan | Timor‑Leste |
| Austria | China | Holland | Lithuania | Peru | Tunisia |
| Bahrain | Cyprus | Hong Kong | Macao | Poland | Turkey |
| Barbados | Colombia | Hungary | Malta | Qatar | UAE |
| Belgia | Côte d'ivoire | India | Mexico | Romania | UK |
| Brazil | Croatia | Indonesia | Moldova | Russia | USA |
| Bulgaria | Cuba | Ireland | Montenegro | São Tomé and Príncipe | Ukraine |
| Czech Republic | Finland | Iceland | Morocco | San Marino | Uruguay |
| Chile | France | Italy | Mozambique | Senegal | Venezuela |
| Croatia | Georgia | Izrael | Norway | Singapore | Vietnam |
How to get the Non-Habitual Resident tax status
Obtaining the NHR status is straightforward and involves only three steps. However, it is only available for new Portuguese tax residents.
Registration of the NIF taxpayer number takes place in person when visiting the Portuguese tax office, by email or through a representative.
The procedure for registering a taxpayer number takes from half an hour to five business days, depending on the application submission method. The nuances of registration and a list of documents for obtaining an NIF.
Citizens and residents of countries outside the European Union receive an NIF through a tax representative. This could be a lawyer or a law firm. At the same time, the address of the tax representative in Portugal is indicated in the application for NIF.
As registration confirmation, the applicant receives a certificate or a plastic card with a unique nine-digit number. Also, the taxpayer has a personal account on the website of the Portuguese tax service.
A change of tax residence occurs if a person lives in Portugal for more than 183 days a year. It is unnecessary to spend six months in a row in the country: the total period of stay is considered so that you can stretch 183 days for the entire reporting year.
The day of stay in the country is counted only if the person has spent the night in Portuguese territory. If you arrive in the morning and leave in the evening of the same day, this period does not count towards 183 days for changing your tax residence.
A person also becomes a tax resident if they have a residential property in Portugal, which is their main place of residence.
You must contact the Portuguese tax office to change your tax residence officially. If, before that, a tax representative acted on behalf of the applicant, then when the residence is changed, the NIF address also changes from the address of the tax representative to the applicant’s registration address in Portugal.
To apply for registration of NHR status, you must fill out a form on the website of the Portuguese tax office.
You must apply for preferential tax status no later than March 31st of the year following the year you change your tax residency to Portuguese. The application indicates the year of obtaining the tax residency certificate in Portugal and the country of the previous tax residence. The applicant also confirms that they meet the conditions for changing tax status.
The application status can be tracked through your account on the tax service website. The decision on the application will also appear in your account as an official document in PDF format.
Who can benefit from the NHR program?
Only new tax residents of Portugal can apply for Non-Habitual Resident tax status. To do this, the applicant must fulfil at least one of the conditions:
- have lived in Portugal for more than 183 days in the last year;
- purchase residential real estate in Portugal, which is used as a permanent residence;
- to serve on a ship or aircraft of a company registered in Portugal on December 31st of the reporting year;
- have been in public service in the foreign missions of the Portuguese government in the past 12 months.
A prerequisite for all applicants is not to have tax resident status and not pay taxes in Portugal for five years before changing the tax residence to Portuguese.
Highly qualified professionals who can participate in the NHR program and pay income tax at a flat rate are:
- architects;
- engineers;
- geologists;
- artists of theatre, ballet, cinema, radio and television;
- singers, sculptors, musicians and painters;
- auditors and tax consultants;
- physicians, such as dentists, surgeons, therapists, physiotherapists, gastroenterologists, ophthalmologists, orthopedists, otolaryngologists, and paediatricians;
- university professors;
- psychologists;
- biologists;
- programmers and IT specialists;
- journalists;
- research and development specialists;
- designers;
- top managers and heads of companies.
Each tax story is different and combines many factors. Your plans for earning income and living in a particular country are of fundamental importance in tax planning. We recommend that you seek advice from specialists in tax structuring who will help you choose the best tax regime based on your current situation and goals.
Head of Legal, AML Compliance officer, certified CAMS specialist
Frequently Asked Questions
The NHR scheme helps foreigners to alleviate their tax burden in Portugal. Preferential tax status is issued for ten years. You can get it once without the possibility of renewing it.
The Portugal NHR program has been operating since 2009 and gives the option to pay fewer taxes. To change your tax residence, you need a Portuguese residence permit to live in the country legally.
You can get a residence permit in different ways — apply for a job in a Portuguese company, enrol in a Portuguese university, marry a Portuguese citizen or invest in the country’s economy.
To apply for the Non-habitual Resident program, you must register in the Portal das Finanças and request a password. The application must be submitted by March 31st of the year following the year they became tax residents in Portugal.
It usually takes about two weeks for an application for the NHR regime to be accepted or declined.
The benefits of the NHR program in Portugal include:
- tax exemption on almost all foreign sources of income;
- a 20% flat rate on certain Portuguese-source income, which may be lower than a standard rate, which is up to 48%, depending on the amount of income;
- exemption of tax on gifts or inheritance to family members;
- no wealth tax.
Once you have been a tax resident for ten years, the NHR status and benefits cannot be used anymore. You will be liable to tax on your worldwide income and gains at the full tax rates.
Only new tax residents of Portugal can apply for Non-Habitual Resident tax status. To do this, the applicant must fulfil at least one of the conditions:
- have lived in Portugal for more than 183 days in the last year;
- purchase residential real estate in Portugal, which is used as a permanent residence;
- to serve on a ship or aircraft of a company registered in Portugal on December 31st of the reporting year;
- have been in public service in the foreign missions of the Portuguese government in the past 12 months.
- Get NIF, an analogue of TIN.
- Change tax residence to the Portuguese one.
- Apply for the NHR tax status.
With NHR status, pensions are taxed at 10%. There is no wealth tax or inheritance and gift tax on assets outside Portugal.
Yes, if they lived in Portugal for more than 183 days during the last year.
