Non-Habitual Resident is a preferential tax status. Holders are exempt from worldwide income tax.
The tax rate on income received in Portugal is limited to 20%
Attracting immigrants with high economic potential is the main objective of NHR tax treatment in Portugal.
Only new tax residents in Portugal can apply for Non-Habitual Resident status. To do this, the applicant must meet the following conditions:
- Have lived in Portugal for more than 183 days in the previous year
- Have a residence status in Portugal
- Have an individual tax number (NIF)
The NHR application must be submitted on or before 31 March following the year in which the applicant becomes resident in Portugal.
The main requirement is that the applicant must not have been a tax resident in Portugal for the last 5 years.
Hence, if the applicant has paid taxes in Portugal in the last 5 years, it is not possible to obtain NHR status.
NHR tax treatment advantages
0% tax on income from foreign sources (employment, professional and business activities for high ADDED value professions)
10% tax on pensions received from foreign sources
20% tax on income from sources in Portugal
What is the application process for NHR status?
NHR status is not granted automatically.
The applicant must submit a request to switch to the preferential tax regime on the website of the Portuguese Tax Agency. This must be done by 31 March of the year following the year in which the applicant became tax resident in Portugal.
In other words, if tax residency is obtained in 2023, the application to switch to the NHR regime must be submitted by 31 March 2024.
Once approved by the Tax Office, the documents confirming the right to transfer to the preferential tax regime must be submitted.