Non-Habitual Residents

Competitive advantages:

• The absence of double taxation in the case of income from pensions and dependent and self-employed work earned abroad.
• Taxation, for a period of 10 years, at a flat IRS rate of 20% on employment income earned in Portugal.

How to Obtain Habitual Resident Status:

• Not have been resident in Portugal for the last 5 years;
• Registering as a tax resident in Portugal at the local tax office. To do so, you must have stayed in Portugal for more than 183 days, consecutive or interpolated, or have a dwelling on December 31 of that year in conditions that suggest that you intend to maintain and occupy it as your habitual residence;

The application for registration as a non-habitual resident must be made electronically on the Finance Portal.

In the case of dependent or self-employed work, the applicable tax rate is 20%. 

Taxation is levied on income from high value-added activities of a scientific, artistic or technical nature:

• Architects, engineers and similar technicians
• Visual artists, actors and musicians
• Auditors
• Doctors and dentists
• Teachers
• Psychologists
• Liberal professions, technicians and asylees
• Investors, administrators and managers

Registration as a Non-Habitual Resident confers the right to be taxed as such for a period of 10 years from the year of registration as a tax resident in Portuguese territory.

Non-Habitual Resident status exempts income earned abroad by Non-Habitual Residents in Portugal from taxation.

In the case of pensioners, when:

• The income is taxed in the State of origin, in accordance with a convention to eliminate double taxation signed by Portugal with that State;
• According to the criteria set out in the IRS Code, the income is not considered to have been obtained from a Portuguese source.

In the case of income from dependent work, when:

The income is taxed in the State of origin, in accordance with a convention to eliminate double taxation entered into by Portugal with that State, or;

The income is taxed in another state with which Portugal has not signed a convention to eliminate double taxation, provided that the income is not considered to have been obtained in Portuguese territory by the criteria of article 18 of the IRS Code;

In addition, the regime establishes a tax exemption for foreign source income, namely property, capital gains, interest, dividends, as well as other capital income, provided that certain conditions are met.

There is no inheritance tax in Portugal.

This information does not dispense with consulting the applicable legislation.