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Non-habitual Residency

Non-habitual Residency

The non-habitual program was first announced in 2009, however with its reforms, the regime offers more attractive tax incentives on personal income taxed for newly resident individuals that are not ordinarily domiciled.

The non-habitual residency regime has granted 30.000 individuals to its program. The French run in the lead with the number of applications, followed by the Italians and the British, and then the Swedes not too far behind.  Individuals with non-habitual residency applications granted until the 31 March 2020, benefit from a tax-free jurisdiction on their pension income.  New applications thereafter will be levied at a 10% rate on their pension. Individuals already benefitting from the tax-free pension scheme are invited to pay the new 10% tax, if they so wish.  For individuals who can benefit from the double tax treaty,  and who declare their foreign income in Portugal, the program remains unchanged with the exceptional tax rate of 20%  on other preferential incentives such as business and professional income, interest, and dividends. This attractive tax incentive covers income deriving from high value-added activities.

To benefit from this tax opportunity, the individual must become a Portuguese tax resident, not having been a tax resident in Portugal in the previous five years. The status also requires a minimum stay in Portugal of 183 days per year, this beneficial residency status can be maintained for a period of 10 years.


NHR Conditions
Below is a detailed outline from the Portuguese Inland Revenue explaining the conditions, who benefits and how to go about this reform.
 
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TAX REGIME

Worldwide law firm Martínez-Echevarría & Ferreira have outlined the NHR incentive program in the following brochure.

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