Portugal Non-Habitual Resident Taxation Regime

The Portugal Non-Habitual Resident Taxation Regime was introduced by virtue of Decree Law no 249/2009 with the aim of attracting foreign individuals and their families to Portugal by making it beneficial from a tax perspective to become a tax resident in Portugal. This special tax regime thus applies mostly to highly skilled professionals, wealthy investors and retired individuals and applies for a consecutive 10 year period.

Eligibility 

One of the main requirements in order to benefit from this special tax regime is to become a Portuguese tax resident, not having been a tax resident in Portugal in the previous five years. This regime applies to both EU and non-EU citizens. 

According to Portuguese Tax laws, an individual is deemed to be a tax resident of Portugal if:

• One is physically present in Portugal for more than 183 days in a calendar year or
• One owns property in Portugal on 31st December as a permanent residence 

To qualify under this regime, non-residents must first obtain a valid residence permit, and then register as a tax resident, and only then apply for the Non-Habitual Resident status. This special tax status has to be requested until March 31 of the year after taking up residency in Portugal.

Non-Habitual Resident Regime - Tax Treatment 

A beneficial tax treatment under the Non Habitual Resident regime applies for a 10 year period. The main tax benefits are the following :

• Portugal source income liable to a special 20% rate if derived from a high value activity;
• Foreign source income including pensions and dividends can benefit from a tax exemption in Portugal for a maximum period of 10 years;
• Foreign source active income may also qualify for an exemption, provided that it is taxed in the source state under a tax treaty with Portugal.

Why work with us

We are able to advise you on the requirements and tax and legal implications of the Portugal Non-Habitual Resident Regime, and indicate expected time frames based on the specific circumstances and nature of your application.