The Non-Habitual Residents Tax Regime (NHR)
New residents can benefit from the Non-Habitual Residents Tax Regime (NHR).
- Not having been a Portuguese tax resident in the five years prior to the request. And,
- Become a Portuguese tax resident. (i.e: remain for more than 183 days in Portugal during the relevant fiscal year; or to have residence in Portugal at 31 December of that year with the intention to hold it as his/her habitual residence.
To be deemed as a non-habitual resident it is necessary to observe the following formalities:
- Application for a Portuguese taxpayer number as non-resident (required documents: copy of passport, Power of Attorney, and proof of a foreign address);
- Change of status to tax resident in Portugal;
- Application for the NHR status.
The application for the NHR shall be submitted to the portuguese tax authority simultaneously with the change of status to resident in Portugal or until march 31 of the year following the change of status to resident in Portugal.
The application for the NHR status has to be submitted accompanied by the following documents:
- Bona fide declaration stating that the individual has not been a tax resident in Portugal in any of the previous five years;
- Income tax returns (from the country of tax residence) for the past five years; and
- Proof of Portuguese address (by owning property in Portugal or by leasing it).
If the Portuguese tax authority has any doubt about the applicant’s tax residency, additional documents/information may be required (e.g. tax residency certificate) to prove that the personal and economical center of interests of the applicant was located abroad in the five years previous to the submission of the application.
Non habitual resident Portugal – Essential aspects of the NHR Regime
- The NHR status is granted for a period of 10 consecutive years, non-renewable.
- Once granted, the holder of the NHR status acquires the right to be taxed according to the Non-Habitual Resident tax regime.
- After the 10-year period, the taxpayer will be taxed under the general rules of the Personal Income Tax Code.