Non Habitual Residents
Portugal has become a popular destination for both tourists and expatriates due to its favourable climate, rich history, and vibrant culture. However, many are unaware that Portugal offers a tax-friendly program for non-residents known as the Non-Habitual Resident (NHR) scheme. This article provides a detailed guide to the NHR scheme, outlining its requirements and how eligible individuals can benefit from it.
The Non-Habitual Resident scheme is a tax regime introduced by the Portuguese government in 2009 to attract foreign investors, entrepreneurs, and retirees who wish to live and work in Portugal while enjoying favourable tax rates. Under this program, qualifying individuals can benefit from a flat tax rate of 20% on their Portuguese-sourced income and exemptions or reductions on certain types of foreign income for up to ten years.
- Be a non-resident for tax purposes in Portugal for the previous five years;
- Register as a tax resident in Portugal;
- Not have been considered a tax resident in Portugal in any of the previous five years;
- Engage in a high-value-added activity, such as science, technology, or culture;
- Possess a valid Portuguese tax identification number.
- A flat tax rate of 20% on Portuguese-sourced income, such as salaries, self-employment income, and business profits;
- Exemptions or reductions on foreign-sourced income, such as pensions, dividends, interest, and royalties;
- No wealth tax or inheritance tax in Portugal;
- Access to the Portuguese social security system;
- Double taxation relief under Portugal’s network of tax treaties with other countries.
To apply for the NHR scheme, an individual must first register as a tax resident in Portugal and obtain a Portuguese tax identification number. This can be done by visiting a tax office in Portugal or appointing a fiscal representative to act on their behalf. Once the tax identification number is obtained, an application for the NHR scheme can be submitted online or by mail.
The application will be reviewed by the Portuguese tax authorities, who will verify the eligibility of the individual and process the request. If approved, the individual will be issued a certificate of residence for tax purposes, which can be used to claim the benefits of the NHR scheme.