How many have already benefited from the Non-Habitual Resident status?

Since the Non-Habitual Resident (NHR) scheme was created in 2009, 23,767 people have already benefited, with the number increasing 85% from January 2017 to August 2018.

Who has already joined the Non-Habitual Resident scheme, in Portugal?

According to the Portuguese Ministry of Finance, the main nationality to benefit from the NHR regime is the French, with 5,896 individuals. Following are Italian citizens (2,646) and the British, with 2,511 people from Great Britain and Northern Ireland. From Sweden, just 2,071 people applied for the NHR. Only 1,502 non-habitual residents are of Portuguese nationality (6%).

Benefits for Non-Habitual Residents

The Non-Habitual Resident scheme has two tax benefits, which grants the right to be taxed as such for a period of 10 years:

1.       Income tax exemption (IRS) for pensioners (this includes pensions, dividends, royalties and interest income) – under a Double Taxation Treaty. In other words, those who, due to their residence in Portugal, stop paying taxes in their country of origin, are also exempt from payment of Personal Income Tax (PIT), according to this scheme. The right to demand payment of income tax is from the State of residence and, at the moment, Portugal exempts the pensioner from paying taxes earned by non-habitual residents abroad.

2.       Applicable tax rate of 20% in the case of dependent and independent workers for value-added activities of an artistic, scientific or technical nature:

a.       Engineers, architects and similar technicians

b.       Actors, musicians and fine artists

c.       Auditors

d.       Doctors, dentists and psychologists

e.       Teachers

f.        Researchers, directors and managers

What are the Requirements for Non-Habitual Resident Status?

Three requirements are necessary to qualify for Non-Habitual Resident status:

1. Living outside Portugal

2. Have not been a Portuguese Tax Resident in the past 5 years

3. Want to move to Portugal. To do this, you must:

a. Remain in Portugal for a minimum of 183 days during the relevant fiscal year;

b. Have an intention to hold habitual residency by buying a property in Portugal.

Step-by-step guide to apply for NHR status:

1. First of all, you will need to register as a tax resident in Portugal, by obtaining a Tax Number (NIF);

2. After requesting a password from the Tax Portal, go ahead and register as a Non-Habitual Resident;

3. After acceptance of the request, keep a copy of the proof;

4. In case of a VAT activity, you must send a certified copy of the proof of activity carried out to the following address:

Direção de Serviços de Registo de Contribuintes

Avenida João XXI, 76, 6º

1049-065 Lisboa

Be aware that when you buy a property with Casas do Barlavento, your consultant can expedite the application process for the NHR regime.

The Non-Habitual Resident status was initially created to attract high-value professionals leaving the country at the time of the economic crisis and, consequently, the entry of Troika. However, it wasn’t a great success with that market. It should be noted that in the last State Budget the intention was to create new fiscal measures (for IRS) for Portuguese who want to return in the next two years. These measures will include a 50% discount on the tax. However, what it doesn’t guarantee is if it will be able to maintain the two regimes simultaneously or if there will be some change to the Non-Habitual Resident status, currently in force.