For those who are foreigners and wish to live in Portugal, or for the Portuguese who have left for another country and now seek to return to Portuguese territory, the tax authorities have a special regime of income taxation. Find out how the tax regime works for the non-habitual resident and, if that is the case, how you can apply for it.
- What is the tax regime for the non-habitual resident?
This scheme was approved in 2009 and grants some tax advantages, over a period of 10 years, to people applying for tax residence in Portugal. The purpose of this special scheme is to attract to our country non-resident professionals qualified in activities of high added value or intellectual property, industrial, or know-how, as well as beneficiaries of pensions obtained abroad, IRS – Fiscal Regime for the Unusual Resident, available at the portal of the National Tax Authority.
- Who can apply for this tax regime?
Citizens who become resident taxpayers in Portugal who have not been considered residents in Portuguese territory during the five years prior to the year of the application may resort to this statute. This applies either to foreign citizens or to Portuguese citizens who are living outside the country and intend to return to Portugal. Remember that to be considered as a resident in Portugal you will have to stay more than 183 days or have a house you pretend to maintain and occupy as usual residence.
- What are the advantages?
The scheme provides the granting of certain tax advantages to these taxpayers. These benefits vary depending on the type of income involved.
For example, taxpayers who earn income from independent and dependent activity in Portugal can benefit from a reduced IRS rate of 20%. However, this rate does not apply to all workers: It applies only to people who have activities of high added value, with a scientific, artistic or technical nature. Among the taxpayers who may benefit from reduced taxation are architects, physicians, tax consultants, psychologists, senior staff, teachers and designers, among others. To check the professional activities covered by this benefit look into the complete list here. This benefit is valid for a period of 10 years.
In the case of a taxpayer with a foreign income source, the method of exemption from taxation in Portugal applies. That is: they do not pay tax here, provided they are taxed in another country or if other criteria provided by law are met.
In case the taxpayer is retired abroad – who receives his pension through another country -, the same principle of exemption from taxation in Portugal applies, provided that one of the requirements is met (eg, taxed in the other Contracting State, in double taxation, or if the criteria set forth in paragraph 1 of article 18 of the CIRS are not considered to be obtained in Portuguese territory).
- How to apply for non-habitual resident tax statute in Portugal?
In order to obtain this statute, the taxpayer must register as a resident in Portuguese territory, at a national tax office or even through the services of the Citizen’s Shop (Loja do Cidadão). It is only after the taxpayer is registered that they can apply for non-habitual resident statute. This request must be made by March 31 of the year following the year in which the citizen became a resident of Portugal. According to the information provided on the portal of the National Tax Authority, in order to formalize the application for this statute, citizens must file an application with the director of taxpayer registration services that is available at any tax office in the country.
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