The Non-Habitual Tax Resident Program
In September 2009, it was established an attractive tax regime for individuals who change their tax residence to Portugal.
Individuals qualify, if they stayed in Portugal for more than 183 days during the year in question or if they had, on the 31st of December of the year in question, a place they intend to use as their habitual residence, and; have not been taxed as tax residents in Portugal in the five years prior to the change of tax residence to Portugal.
The tax regime for non-habitual residents is provided for in the Personal Income Tax Code and is intended to attract certain qualified individuals and investments to Portugal.
The Portuguese Government has published a list of professional activities that must be considered as “activities with high added value of a scientific, artistic or technical nature” (relevant for self-employed or third-party income). In accordance with this tax regime, income from “high added value activities” earned by non-habitual residents in Portugal is subject to a fixed rate of 20% for tax purposes.
The law also establishes a tax exemption for income from foreign sources under certain specific conditions. Income from work obtained within the scope of carrying out activities with high added value, property income, interest, dividends, as well as other investment income are usually exempt from tax in Portugal.
Pensions earned by individuals covered by the non-habitual residents regime are taxed at an autonomous rate of 10%.
These benefits are applicable for a period of ten consecutive years, provided that, in each year, the individual meets the criteria to qualify as a tax resident.
The application for registration as a non-habitual resident should only be made after registration as a tax resident in Portuguese territory. Registration as a non-habitual resident must be requested by no later than March 31 of the year following that in which the individual registers as a tax resident in Portuguese territory.