Non-Habitual Resident Status (NHR)

Eligibility for Non-Habitual Resident status:

The Non-Habitual Resident Tax Regime is a statute that offers tax advantages for foreigners who decide to live in the country, Portuguese who have lived outside the country and intend to return to Portugal can also benefit from the RNH.

The scheme may be requested by:

• Foreigners or Portuguese who have not been tax residents in the country in the last 5 years and who want to transfer their residence to Portugal;
• Persons who are tax residents in Portugal in the year they will apply for registration in the scheme. In this case it is necessary to have stayed in the country for 183 days or, if you have stayed less time, be able to prove a bond of residence.

After registration, the scheme is applicable for a period of 10 years – valid from the year in which the registration was made as a resident in Portugal. After that time, it cannot be renewed.

The main Advantage offered to those who opt for the Non-Habitual Resident Scheme are:

• Amounts received for service provision from outside the country may also be exempted if they are taxed at source or in another country (it is valid for technical, scientific, artistic or industrial or intellectual property income);
• The amounts received by works (against themselves or on behest of others) have an incidence of IRS (Personal Income Tax) with the rate of 20%. It is valid for works in the technical, scientific or artistic areas – also valid for 10 years;
• Taxation of 10% on the value of pensions from abroad for a period of 10 years (whether they are taxed in the country of origin);
• Passive income such as dividends, interest, rental income and capital gains from securities, when originating from Portuguese sources, are subject to IRS at a flat rate of 28%, under the general terms.

The discount of the Income Tax of Portugal may focus on the reform.

Activities considered for the NMR regime:

Currently, the high added value activities that are considered relevant to the scheme are those contained in Article 72(10) and Article 81(5) of the CIRS (Code of Personal Income Tax) are as follows:

Professional activities (Codes of the Portuguese Classification of Professions – CPP)

• 112 – Director-General and Executive Manager of companies;
• 12 – Directors of administrative and commercial services;
• 13 – Directors of production and specialized services;
• 14 – Directors of hospitality, catering, commerce and other services;
• 21 – Specialists in physical sciences, mathematics, engineering and related techniques;
• 221 – Doctors;
• 2261 – Dentists and stomatologists;
• 231 – Professor of university and higher education;
• 25 – Specialists in information and communication technologies (ICT);
• 264 – Authors, journalists and linguists;
• 265 – Creative artists and the arts of the show;
• 31 – Technicians and professions of science and engineering, intermediate level;
• 35 – Information and communication technology technicians;
• 61 – Farmers and skilled workers in agriculture and animal production, market-oriented;
• 62 – Skilled Forest, fishing and hunting workers, market-oriented;
• 7 – Skilled workers in industry, construction and craftsmen, including in particular skilled workers in metallurgy, metalworking, food processing, wood, clothing, handicrafts, printing, the manufacture of precision instruments, jewelers, craftsmen, workers in electricity and electronics;
• 8 – Operators of installations and machinery and assembly workers, in particular operators of fixed installations and machinery.

Other professional activities

Administrators and managers of companies promoting productive investment, if they are related to eligible projects and with contracts for granting tax benefits concluded under the Investment Tax Code, approved by Decree-Law No. 162/2014, of October 31.

Activities excluded from the RNH

Currently, auditors, tax consultants, psychologists and archaeologists are no longer included in the list of high added value activities.

RNH request process

The application must be made only after registration as a resident in Portugal and must be made directly to the Finance (Tax and Customs Authority).

Deadline to apply for RNH:

The Unusual resident scheme can be requested in two moments:

• At the time of registration as a tax resident in Portugal; or
• Until March 31 of the year following the year of registration as a tax resident.