Non-Habitual
Resident

Citizens who are eligible for NHR status will have their income taxed by a special IRS regime (with a special tax) for a maximum period of 10 years, non-extendable. Over this period, NHR status provides access to more competitive tax regime that operates on two levels:

Portuguese Source Income

Income from employed and self-employed work (category A and B), if resulting from the exercise of a high value-added profession whether scientific, artistic or technical, is taxed at a special rate of 20%.

Foreign Source Income

If income is earned abroad, whether from pensions, employed or self-employed work, they will not be subject to double taxation under the exemption method provided certain conditions are met. Such conditions may vary according to the type of income in question:

• Work Income (Employment and Independent)

The exemption method is applicable to income that is subject to taxation in another country with which Portugal has entered into a double taxation treaty, or, in the absence of a double taxation treaty, where income may be taxed abroad and the source of income is not considered Portuguese in accordance with Portuguese domestic law and as long as the other country is not on the list of clearly more favourable privileged taxation regimes approved by the Minister of State and Finance.

• Pension Income

The NHR regime allows pensions to be received in Portugal without taxation. This exemption applies whenever income is subject to taxation in another country with which Portugal has entered into a double taxation treaty, or, in the absence of a double taxation treaty, where the source of income is not considered Portuguese in accordance with Portuguese domestic law. This scheme applies only insofar as the person concerned has not deducted contributions made in Portugal to the social security system which produced the pension income.

• Corporate income, Capital Income, Capital Gains or Gains and Property Income

In these cases (except corporate income), the exemption applies where income may be subject to taxation in another country with which Portugal has entered into a double taxation treaty or, in the absence of a double taxation treaty, income could be taxed in the other country, region or territory under the OECD Model Income and Capital Convention, interpreted in accordance with observations and reservations made by Portugal, and that income is not considered to be of Portuguese source in accordance with domestic law.

For Portuguese business income, the exemption applies only to services considered to be of scientific, artistic and technical added value, intellectual property and knowledge transfer. Foreign income other than category A, B, F, E, G and H are taxed in Portuguese territory

Eligibility for the NHR programme is open to both Portuguese and foreign nationals that:

• Have had tax residence outside Portugal within five years prior to the application.
• Have established their tax residence in Portugal.
• Have high added value training or work experience as detailed in the below list

(Applicants are only considered as resident in Portugal after having remained on Portuguese soil for more than 183 consecutive days.)

List of High Value-Added Professions

In order to join the non-habitual resident programme it is necessary to practice a profession listed in Ordinance No. 230/2019 of 23 July, which amends and republishes the list of professions attached to Ordinance No. 12/2010 of January 7th. Changes to the list of occupations will not take effect until 1 January 2020.

Workers covered by the following occupational activities must have at least the European Qualifications Framework qualification level 4, the International Standard Education Classification level 35, or hold five years of duly proven professional experience:

• CEO and executive manager of companies.
• Directors of administrative and commercial services.
• Production and specialized services directors.
• Hotel, restaurant, trade and other services directors.
• Specialists in the physical sciences, mathematics, engineering, and related techniques.
• Doctors.
• Dentists and stomatologists.
• Professor of university and higher education.
• Specialists in information and communication technologies (ICT).
• Authors, journalists and linguists.
• Creative and performing arts artists.
• Intermediate science and engineering technicians and professions.
• Information and communication technology technicians.
• Market-oriented farmers and skilled agricultural and livestock workers.
• Skilled market-oriented forest, fishing and hunting workers.
• Skilled workers in industry, construction and craftsmen, including in particular skilled workers in metallurgy, metalworking, food processing, woodworking, clothing, crafts, printing, precision instrument manufacturing, jewellers, craftsmen, electricity and electronics.
• Plant and machine operators and assembly workers, namely fixed installation and machine operators.

Additionally, the managers of companies promoting productive investment may also apply, provided that they affect eligible projects and with agreements to grant tax benefits entered into under the Investment Tax Code, approved by Law No. 162 / 2014, October 31st.

Once the mandatory requirements are met, you must apply for non-habitual resident status by March 31st, inclusive of the year following that in which you become a resident of Portuguese territory.