The conditions for the registration and operation of the tax regime for holders of NHR Portugal status are enshrined in Legislative Decree No. 249 of September 23rd, 2009.
What is Non-Habitual Resident tax status in Portugal
Preferential tax status is issued for ten years. You can only get it once, but you cannot renew it.
Fixed tax rate on income from employment. Highly qualified professionals who receive salaries from Portuguese companies or work in Portugal as self-employed can pay income tax at a rate of 20%. In a standard situation, income tax is levied on a progressive scale: the rate can be up to 48%.
Personal income tax rate in Portugal
|Annual income||Rate for a Non-Habitual Resident||Rate on general conditions|
|Up to €7,112||20%||14,5%|
|€7,112 to €10,732||23%|
|€10,732 to €20,322||28.5%|
|€20,322 to €25,075||35%|
|€25,075 to €36,967||37%|
|€36,967 to €80,882||48%|
|€80,882 to €250,000||48%|
+ 2.5% — additional tax
+ 5% — additional tax
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 global 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;
- income from employment in another country.
The income must be received from foreign companies and funds. You do not need to pay dividend and interest tax only if the income is received from a country that is not an offshore jurisdiction.
Global income tax rate in Portugal
|Income type||Rate for a Non-Habitual Resident||Rate on general conditions|
|Dividends, interest and royalties||0%||28%|
|Labor income||Up to 48%|
Global income and retirement benefits are tax exempt in Portugal if taxes are paid in the source country. At the same time, an agreement on the avoidance of double taxation or a model convention of the Organization for Economic Cooperation and Development on taxation of income must be concluded between Portugal and such a country.
Each tax story is different and combines many factors. In tax planning, your plans for earning income and living in a particular country are of fundamental importance. We recommend that you seek advice from specialists in tax structuring, who will help you choose the best tax regime for you, based on your current situation and goals.
Head of the Portuguese office of Immigrant Invest
Who can benefit from the preferential tax regime
Only new tax residents of Portugal can apply for Non-Habitual Resident tax status. To do this, the applicant must fulfill 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 obtain Non-Habitual Resident status and pay income tax at a flat rate are:
- artists of theater, 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 pediatricians;
- university professors;
- programmers and IT specialists;
- research and development specialists;
- top managers and heads of companies.
How to get the Non-Habitual Resident tax status
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 working days, depending on the method of submitting the application. The nuances of registration and a list of documents for obtaining a 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 confirmation of registration, 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 not necessary to spend six months in a row in the country: the total period of stay is taken into account, so 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 mo ing and leave in the evening of the same day, this period does not count towards 183 days for changing your tax residence.
Head of the Portuguese office of Immigrant Invest
A person also becomes a tax resident if he has a residential property in Portugal, which is his main place of residence.
To officially change your tax residence, you need to contact the Portuguese tax office. 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.
Obtaining the preferential tax status. 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 Portugal and the country of the previous tax residence. The applicant also confirms that he meets the conditions for changing tax status.
The status of the application can be tracked through your personal account on the tax service website. The decision on the application will also appear in your personal account as an official document in PDF format.
How to get a residence permit and start paying taxes in Portugal
To stay in the country for more than 183 days a year and change your tax residence, you need a Portuguese residence permit. You can get a residence permit in different ways. For example:
- apply for a job in a Portuguese company;
- enroll in a Portuguese university;
- marry a Portuguese citizen.
Wealthy people can also obtain a residence permit by investing in the Portuguese economy. Investing money is allowed in one of eight options.
Investment options for the residence permit program in Portugal
Holders of a residence permit in Portugal have the right to live, work, conduct business and study in the country without restrictions. They also have the right to change their tax residence to Portuguese if they move to live in the country or buy property under the program.
The Portuguese residence permit card entitles you to visa-free travel to the Schengen countries and the UK. After five years of maintaining resident status, the investor can apply for Portuguese citizenship.