Non-Habitual Residency scheme (NHR)

Benefits:-

This scheme offers the following benefits to employees or self-employed persons that wish to retire in Portugal:-

• For a period of 10 years, taxation related to IRS (personal income tax) on labour income in Portugal is at a fixed rate of 20%
• No double taxation for pension incomes *) or for employment and self-employment income obtained abroad

*Since April of 2020, there have been some modifications to the NHR scheme with the main change being an implementation of 10% tax on foreign schemes per retiree, which still favours comparably to other countries in the European Union.

“This has been a very popular scheme with Government statistics showing over 8,000 applications received for NHR status up until the end of 2016” – Vitor Ferreira

Criteria:-

To be eligible for this scheme you must satisfy the following criteria:-

• have not been a tax resident in Portugal for the previous five years

• You can meet the terms of Portuguese residency – currently this stipulates spending more than 182 days a year here or having your primary residence in Portugal

For further information on eligible income types under the NHR scheme as well as the taxaction code, please click here. 

For a more in depth look at all the requirements with relation to the tax consequences for this scheme we recommend that you speak to a specialist accountant on this subject by clicking here.