Portuguese tax law that allows individuals to benefit from a special tax status for a period of 10 years. Europe’s best kept secret
The non-habitual resident tax scheme (“NHR”) is a scheme established under Portuguese tax law that allows individuals to benefit from a special tax status for a period of 10 years. This scheme was introduced in 2009 with a view to attract foreign talent and investment to Portugal to increase the country’s international competitiveness and has been called “Europe’s best kept secret” by tax and consulting firms such as Pwc as it has been very successful in offering advantageous tax breaks for foreign residents.
The NHR scheme can be granted to both active and retired people meeting certain criteria. To be eligible to obtain the non-habitual resident (“NHR”) status from the Portuguese tax authorities (“Finanças”), you essentially need to meet the following two conditions:
a) You have stayed in Portugal for more than 183 days, whether consecutive or not, in any 12-month period beginning or ending in the year in question; or
b) You have stayed here for less time but have, on any day of the said 12-month period, a domicile available to you under conditions that make it possible to presume your intention to hold and occupy it as a habitual place of residence. This requirement does not mean you have to purchase property in Portugal, a rental contract for 12 months can be considered sufficient to prove such intention.
Non-EU/EEA/Swiss citizens who wish to apply for the NHR regime in Portugal shall first obtain a residency permit in Portugal and this can be done through Portugal’s Golden Visa program. Then, they become eligible for the NHR regime in Portugal.
The key advantages of the Portuguese NHR status are:
The first step is obtaining the residency status in the country. To do so, you must have the legal right to reside in Portugal.
EU/EEA/Swiss are allowed to register for residency without a visa. Non-EU/EEA/Swiss citizens who wish to apply for the NHR regime must first obtain a residence permit. This permit can be obtained in different ways, the most common one being through the Golden Visa.
The NIF (Numero de Identificação Fiscal) is a 9-digit number that allows your identification for tax purposes.
After obtaining your NIF, you must register as a tax resident in Portugal.
You will have to fill in an application form and submit complete supporting evidence, notably:
You must file your complete application for the NHR status in Portugal by 31 March of the year following the year of your registration as a tax resident in Portugal.
Get a tax lawyer In order to increase your chances to obtain the NHR status, it is important to prepare your file very well and do things in the right order or your NHR dream may fly away… We advise you to get a Portuguese tax lawyer who will help get a better grasp of Portuguese tax law and who will assist you in this process. The tax lawyer will help you confirm that you can benefit from the NHR status, get a Portuguese tax number (NIF), prepare and submit your application and monitor its progress.
Get an accountant who will help you report your income in Portugal.
Hurry :) We don’t know how long the access to the NHR scheme will be available nor when its conditions may change as every year since it was first established voices have raised against this regime in Portugal. We therefore advise you to take care of your application as soon as possible.
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