Non Habitual Resident (NHR) special tax regime in Portugal

What is NHR and how it works: 0% on taxes on income received abroad while resident in Portugal.

Content verified by Anna Rudokvas
Certified Accountant and Tax Advisor in Portugal with 10+ years of experience.
The member of the Bar Association, tax partner of MigRun.

What is NHR?

Non Habitual Resident (NHR) status is an exemption for "unusual" tax residents in Portugal.
Works only for individuals, self-employed, and entrepreneurs: highly skilled workers, owners of property, funds, know-how, as well as pensioners with passive income outside of Portugal. Does not apply to companies and professions and sources of income that are not listed (watch below).
The NHR entitles you to 0% on non-Portuguese income for 10 years (if it is part of the Double Taxation Convention), and a flat rate on domestic income of 20%, usually the rate can go up to 53% depending on your income.

Am I eligible for the NHR?

Here are the criteria to see if you can become an atypical tax resident and get NHR in Portugal.
Need to connect
NHR does not turn on automatically, you need to apply for it in your personal account of the Finance (Portuguese tax office). It is important to apply for NHR no later than March 31 of the next year from the moment you became a tax resident. Otherwise, you will forever lose this opportunity
Meet criteria
Here is a list that shows occupations that qualify under the NHR.
When applying for the NHR, no one will check this, but at some point, the tax office may look at your contracts, which should say that you work in this specialty.
If you have not paid taxes in Portugal for 5 years
The tax authorities in Portugal may request proof of tax residency and taxation abroad for the previous 5 years. Usually, the Portuguese tax authorities require a certificate of tax residency in the country of the previous residence, issued in accordance with the terms of the Double Tax Treaty signed with Portugal.

NHR Tax Status: Everything you need to know

NHR exempts only foreign income for 10 years. Local taxes are paid at 20% (or 20% already paid and declared in another country).

They do not like to talk about this, but it is important to know: if you live and work from Portugal for a foreign company, the tax office may decide that this is no longer foreign income but received in Portugal. And oblige you to pay taxes here.

In order for your remote income to remain at 0% NHR, you need to prove that the center of your vital interests is still located in another country.
Therefore, it is better to have the proof:
  • the central office of your employer or clients, as well as your company, is not located in Portugal
  • you have people in subcontracting, assistants, that you delegate to them some of the functions that you cannot perform remotely
  • store correspondence with partners about meetings, new contracts
  • tickets to the country of your source of income,
  • when submitting an IRS declaration, select type B - self-employed, there is a window where the central office is - you must specify an address in another country.
Legal advice: When filing an IRS return in Portugal, always simulate the amount of tax payments. Sometimes it is profitable to rent by activating the status, or not using this status at all in a given tax year. For example, if there was no income or it was small, it can be beneficial to register a declaration at a progressive rate and not connect (for incomes less than 7.112 € per year, the rate will be 14.5% instead of 20% according to NHR)

Instructions: how to connect NHR

You can hire an accountant for this,
Or you can do it yourself with the following instructions:
1
How to Request NHR: you can immediately after change the address of the tax representative to yours in your personal account on the tax website or in person at the branch.

To apply for NHR status, you no longer need to have a tax representative (representante fiscal) in Portugal and register your residential address. (if you have a tax representative, you will not get NHR status)
2
You can apply for NHR in finance online.
Go to your personal account/type in the search bar e-balcão / atendimento (aceder) / registrar novo questão / in the line imposto ou area select registo contribuinte / in the line tipo de queståo select identific / in the line Queståo select Alteraçåo Morada / singulares / then in in the dialog window Alguma destas responde às suas dúvidas press não/ a form will open/ write using google translate in Portuguese that you want to change the address and refuse the representative, and attach below the scans of the contract proving the new address/ receive confirmation there, which is accepted and changed. Or personally submit documents at any branch.

Write using google translate in Portuguese that you want to change the address and refuse the representative, and attach below the scans of the contract proving the new address / receive confirmation there that is accepted and changed. Or personally submit documents at any branch.
3
Attach in a letter a contract for rent or purchase of real estate with your address
4
From now on, you are a full tax resident of Portugal and can, for example, register a company or individual entrepreneur
5
You can also hire a tax representative in person: at the branch and at Loja da Cidadão. Do not forget your residence and proof of registration in Portugal or rental agreement

Full list of professions for NHR

1 - Architects, engineers, and similar technicians:
101 - Architects;
102 - engineers;
103 - Geologists.

2 - Artists, actors, and musicians:
201 - Artists of the theater, ballet, cinema, radio, and television; 202 - Singers;
203 - Sculptors;
204 - Musicians;
205 – Artists.

3 - Auditors:
301 - Auditors;
302 - Tax consultants.

4 - doctors and dentists:
401 - Dentists;
402 - Medical analysts;
403 - Surgeons;
404 - Ship doctors on ships; 405 - General practitioners;
406 - Dentists;
407 - Dentists; 408 - physiotherapists;
409 - Gastroenterologists; 410 - Ophthalmologists;

Doctors
411 - Orthopedic doctors;
412 - otorhinolaryngologists;
413 - pediatricians;
414 - Radiologists;
415 - Doctors of other specialties.

5 - Teachers:
501 are university professors.

6 - Psychologists:
601 - Psychologists.

7 - Humanitarian, technical, and equivalent professions:
701 - Archaeologists;
702 - Biologists and physicians;
703 - Programmers;
704 - Consultations and computer programming and activities related to information and computer technologies;
705 - Computer programming activities;
706 - Computer consulting activities;
707 - Management and operation of computer equipment;
708 - Activities for the provision of information services;
709 - Data processing, information placement, and related activities; web portals;
710 - Data processing, information placement, and related activities; 711 - Other activities for the provision of information services;
712 - Activities of news agencies;
713 - Other activities for the provision of information services;
714 - Scientific research and development;
715 - Research and development in the field of physical and natural sciences;
716 - Research and development in the field of biotechnology;
717 - Designers.

8 - Investors, administrators, and managers:
801 - Investors, directors, and managers of companies promoting productive investments, provided that they belong to eligible projects and have tax concession agreements signed in accordance with the Investment Tax Code, approved by Decree-Law No. September; 802 - Senior management of companies

Do you have any questions regarding NHR?

Feel free to contact us

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