Update on the Non-Habitual Resident (NHR) Tax Regime

Registration as non-habitual resident will be possible until March 2025

Registration as non-habitual resident will be possible until March 2025

Update on the Non-Habitual Resident (NHR) Tax Regime

LPA Legal is pleased to share important information regarding recent changes in the tax regime for Non-Habitual Residents (NHR) in Portugal.

In light of the recent news about the termination of the NHR from January 1st, 2024, and the establishment of a transitional period, we would like to communicate that the Portuguese Tax Authority has issued clarifications regarding the transitional regime.

As stipulated in article 236 of the State Budget Law for 2024 (SBL 2024), the tax regime for NHR, as previously in force before its repeal, will continue to apply until the end of the tenth consecutive year from the year of registration as an NHR. This provision applies to individuals who:

a) Are already registered as NHR with the Portuguese Tax Authority from January 1st, 2024, until they complete 10 years of entitlement to taxation as NHR;
b) Meet the conditions established in article 16 of the Personal Income Tax Code (PITC) for qualification as a tax resident in Portugal from December 31st, 2023, and apply for registration as NHR with effect from the year 2023 until March 31st, 2024;
c) Become tax residents by December 31st, 2024, and subsequently apply for registration as NHR with effect from the year 2024 until March 31st, 2025, declaring their eligibility as NHR.

To qualify, individuals must meet one of the following criteria:

1. Have a promise or employment contract with duties in Portugal until December 31st, 2023;
2. Have a lease agreement or another property contract in Portugal until October 10th, 2023;
3. Have a property reservation contract in Portugal until October 10th, 2023;
4. Enroll dependents in Portuguese educational institutions until October 10th, 2023;
5. Have a valid visa or residence permit until December 31st, 2023;
6. Initiate visa or residence permit procedures until December 31st, 2023;
7. Be family members of taxpayers mentioned in subparagraphs a), b), or c) of article 236, paragraph 3, of SBL 2024.

To prove eligibility, taxpayers must submit supporting documents when requested by the Tax Authority services.

For applications submitted after March 31st, 2025, the NHR status will take effect from the year of application until the end of the tenth consecutive year from 2024, the year of residence in Portugal.

It is important to note that individuals must engage in high value-added professions, as specified in Decree No. 12/2010, of January 7th, to access this regime.

We believe that this information will be helpful in understanding the recent changes in the NHR tax regime. If you have any questions or need assistance with registration, do not hesitate to contact our team.

Update on the Non-Habitual Resident (NHR) Tax Regime

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