Non Habitual Resident – NHR - News
Following the announcement of the Portuguese Government last October 2023, of ending the NHR (Non Habitual Resident) tax regime, the decision soon suffered alterations with the introduction of criteria which will allow the regime, during 2024, to continue to be applicable to those who meet one of the following conditions:
- On January 1st, 2024, are already registered as an NHR in the Portuguese Tax Department;
- On December 31st, 2023, meet the conditions for qualification as a resident for tax purposes in Portuguese territory.
- Becomes a resident for tax purposes until 31st December 2024 and declares, for the purposes of their registration as a non-habitual resident, to have one of the following conditions:
- Promise or contract of employment, entered into until 31st December 2023, whose exercise of functions must take place in national territory;
- Lease agreement or other agreement granting the use or possession of real estate in Portuguese territory entered into until October 10th, 2023;
- Reservation contract or promissory contract for the acquisition of a real right over real estate in Portuguese territory entered into until October 10th, 2023;
- Enrolment (personal or for dependents), in an educational establishment domiciled in Portuguese territory, completed by October 10th, 2023;
- Residence visa or residence permit valid until 31st December 2023;
- Procedure, initiated by 31st December 2023, for the granting of a residence visa or residence permit, with the competent authorities.
Therefore, apart from the situations above indicated, from the 1st of January 2024, the new regime that will replace the NHR will be a “Fiscal Incentive to Scientific Research and Innovation”, which will apply the same fiscal benefits of the former NHR but only to careers of higher education and scientific research teachers, including scientific employment in entities, structures and networks dedicated to the production, dissemination and transmission of knowledge, integrated in the national science and technology system.
Non-Habitual Resident Regime
It’s important to clarify that the NHR regime is not a residence permit, it is a fiscal regime, designed to attract qualified professionals, individuals with patrimony and investors.
The NHR regime is aimed for any citizen, from the European Union or from a third state, who wishes to become a resident in Portugal for fiscal purposes, benefiting from a very interesting tax regime on their income, arising in Portugal or abroad, which includes tax exemptions on several types of income arising abroad;
What are the advantages of Portugal’s Non-Habitual Residency?
- foreign income is largely exempt from taxation in Portugal;
- A flat rate of 20% on employment or self employment income generated in Portugal for high valued added professions (instead of the potential 53% maximum rate applicable);
- Pensions are taxed on a flat 10% rate.
How long is the NHR valid for?
It´s valid for 10 years non-renewable, followed or interrupted. After that period, as a Resident in Portugal, all your income needs to be taxed here as for any other Resident in the country.