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What is the NHR tax regime in Portugal?

Movingto Editorial Team
December 23, 2022

The NHR (Non-Habitual Resident) tax regime in Portugal is a special tax regime designed to attract highly qualified individuals to work and live in Portugal. It allows individuals who are not tax residents in Portugal to be taxed at a flat rate of 20% on their foreign-source income, rather than being subject to the progressive tax rates that apply to Portuguese residents.

To qualify for the NHR tax regime, an individual must meet the following requirements:

Be a tax resident of Portugal: To be considered a tax resident of Portugal, an individual must either spend more than 183 days in Portugal in a tax year, or have their main home in Portugal.

Be a non-habitual resident of Portugal: To be considered a non-habitual resident, an individual must not have been a tax resident in Portugal for at least the previous five years.

Engage in a qualifying activity: To qualify for the NHR tax regime, an individual must engage in a qualifying activity, such as working as a freelancer or providing services as a professional.

Meet other requirements: There are a few other requirements that must be met in order to qualify for the NHR tax regime. For example, the individual must not receive a pension from the Portuguese state and must not be a shareholder or member of a company resident in Portugal.

If an individual meets these requirements, they can apply to the Portuguese tax authorities to become an NHR and benefit from the favorable tax treatment provided by the NHR tax regime. The NHR tax regime is valid for a period of 10 years, after which the individual will be subject to the regular tax rules that apply to Portuguese residents. Please, for more information check of NHR article.

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