Overview of the regime

 

Overview of the regime

Non-habitual resident (“NHR”) individuals shall benefit from the special tax Personal Income Tax (“PIT”) regime for a ten year period. Under this regime, individuals qualifying as non-habitual residents are eligible for special income tax rates applicable to Portuguese sourced income and may benefit from potential tax exemptions on foreign sourced income, as explained below.

Introduction

Portugal created a special regime for new residents (also applicable to Portuguese out bounds living abroad for many years) designed to promote the transfer of residence of skillful professionals, entrepreneurs and investors, by offering attractive tax opportunities at the individual level.

This summary provides a brief overview and explains the main guidelines and potential implications of this new regime for foreigners and for Portuguese individuals settling in Portugal after an extended period of living abroad.

 

Portuguese source income

Portuguese sourced employment and self-employment income shall be liable to a special 20% flat rate if derived from high value added activities of scientific, artistic or technical character performed in Portugal, as listed in a Ministerial Order.

Examples: Architects, doctors, university teachers, designers, IT technicians, engineers, researchers, liberal professions, investors and managers under certain conditions.

Other types of domestic income received by NHRs are liable to tax according to the rules applicable to ordinary tax residents.




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