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Become a tax resident in Portugal and benefit from special conditions, applicable for at least a guaranteed 10-year period. Send us a message

Non-Habitual Tax Resident Regime

One of the main tax attractions offered by Portugal to foreign citizens is the Non-Habitual Tax Resident Regime (NHR).

The Non-Habitual Tax Resident Regime is a special tax regime applicable to individuals (and their families) who become tax residents in Portugal without having been so in the 5 previous years. Non-habitual tax resident individuals may enjoy from such a status for a ten-year period.

For an individual to become a tax resident in Portugal one of the two following conditions has to be met:

  • Spending at least 183 days in Portugal in one given year, whether continuously or not;
  • Having a home in Portuguese territory that can be considered as 'habitual residency' in a given year.

Once the NHR status is granted, there is an array of special tax benefits applicable to both foreign-sourced income and to income obtained in Portugal.

As for foreign-sourced income, full exemptions may apply to income from dependent work, from independent personal services, from capital (whether in the form of interest, dividends, etc.), from capital gains and from immovable property. This means that, if the applicable conditions are met, Portugal will not tax these types of income, so the only taxation possibly applicable will be the one related to the source (of the income) State. A special remark is due to the case of income coming from pensions, which may be exempt in both Portugal and the source State, thus configuring a very attractive case of 0% taxation.

As for income obtained in Portugal from dependent work and from independent personal services in activities that are considered, under Portuguese law, to be high value-added activities (which is a very wide category), a 20% flat rate will apply. Other kinds of income obtained in Portugal are taxed at different special rates.

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