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 international 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.