taxes in portugal vat portugal non habitual resident status nhr

Taxes in portugal Vat portugal

NON-HABITUAL RESIDENT STATUS (“NHR”)

Taxes in portugal Vat portugal

NON-HABITUAL RESIDENT STATUS (“NHR”)

 

What does it mean?

The Non-habitual residence (NHR) is a legal regime granting certain tax benefits to people that become Portuguese tax residents according to national rules.

How long is the NHR valid for?

The NHR regime is applicable for a period of up to ten years, from the moment the applicant becomes a tax resident in Portugal.

Who can benefit from the NHR?

A person who

a) is considered as tax resident in Portugal in the year to which the income relates, and

b) has not been tax resident in Portugal in the previous five years.

What are the rules of tax residence in Portugal?

A person must be considered as a tax resident in Portugal if:

A) He\She  has spent 183 days (continuously or not) in Portugal in any given 12-month
period;

B) In case of having spent less than 183 days, he\she has to have a home in Portugal in conditions that can be assumed that it is the taxpayer´s intention to use it as a place of residence.

Main benefits

a) Foreign sourced income:

People who are registered as NHR may be exempt from income tax (IRS) in Portugal for foreign-sourced income. In spite of that, foreign pensions sourced outside Portugal will be taxed in Portugal at the special rate of 10%.

b) Portuguese sourced income:

Employment and self-employment income earned that qualifies as “high value-added
activities” of a scientific, artistic, or technical nature. That income will be subject to a special rate of 20% if the option to encompass is not exercised.

Important notes

A) NHR status does not provide a full tax exemption, but rather an exemption on certain
types of income

B) A person registered as NHR, must comply with all the reporting obligations laid down in the law, in particular regarding the annual tax returns, declaring the worldwide income earned.
Taxes in portugal Vat portugal

For more information – Contact us

voltar listagem

Page Reader Press Enter to Read Page Content Out Loud Press Enter to Pause or Restart Reading Page Content Out Loud Press Enter to Stop Reading Page Content Out Loud Screen Reader Support