Portugal Tax Residency

Non-Habitual Residency Programme

Since its introduction in 2009, Portugal’s non-habitual resident (NHR) programme has been attracting skilled professionals, high net worth individuals and pensioners to establish tax residency in Portugal.

NHR enables qualifying individuals to become tax residents of a white-listed jurisdiction whilst legally minimising or eliminating tax on most categories of foreign-source income for a minimum period of 10 years.

Qualification Requirements

To qualify as a NHR, an individual must meet the following requirements:

• Be tax resident under Portuguese domestic legislation and
• Not have been taxed as a Portuguese resident during the previous five years

To be considered as a tax resident, the individual should:

• Remain for more than 183 days in Portugal during the relevant fiscal year or
• Have a residence in Portugal at 31 December of that year with the intention to hold it as their habitual residence.

Qualifying applicants are issued a Residency Certificate and Tax Identification Number.

Tax Efficient Benefits

• Portugal has more than 60 double tax treaties, foreign sourced income is therefore exempt from income tax provided that:
  • It is taxed in the source State according to the applicable Tax Treaty or
  • If no Treaty is applicable, the income is effectively taxed in the source State and it is not deemed as derived in Portugal

• When derived from high value-added activities Portuguese sourced income is taxed at a flat rate of 20%
• No tax applicable to foreign sourced pensions, dividends, rental income, interest and capital gains when structured correctly
• No inheritance tax on assets passed to a spouse, descendants or ascendants
• No wealth taxes
• Portuguese companies may take advantage of EU non-discrimination rules and EU Directives on mergers, dividends, interest and royalties, as well of Portuguese double tax treaties.