NHR Regime –General Overview
This regime was introduced in 2009 to attract individuals and their families to Portugal by making it beneficial from a tax perspective to become a tax resident.
NHR status can result in salaries, pensions, dividends, tax on interest and investment income originating in a non-Portuguese source being exempt from, or being subject to a preferential rate of, personal income tax.
The only requirement to benefit from the NHR status is become a Portuguese tax resident, not having been a Portuguese tax resident in the previous 5 years.
The NHR status can be maintained for 10years.
Successful NHR applicants will be exempt from personal income tax on qualifying income if it is subject to tax in the country of source under an existing Double Tax Treaty which permits this.
If no Tax Treaty exists the income will be exempt if it were subject to tax in another jurisdiction and is not considered as Portuguese source income under domestic rules.
Special flat rate of 20% applicable for certain types of income arising from highly qualified activities.
To become a Non-Habitual Resident it is necessary to be a Portuguese tax resident i.e.: have habitual domicile in Portugal; spend more than 183 days in Portugal in the tax year; or have a dwelling in Portugal at 31 December of that year with intention to hold it as habitual residence.
Also necessary not to have been a tax resident in the previous 5 years.
2013 saw a growing optimism and interest in Portugal as a place to invest with a focus on the real estate market.
Properties in locations such as Lisbon, Porto, Algarve and the Silver Coast offer excellent investment opportunities and good value for money.
The Portuguese Governments Non Habitual Resident Status tax regime (NHR) allows international investors who become tax resident in Portugal to enjoy an exemption or reduction on their personal income tax, arising in Portugal or overseas.