Portugal’s Non-habitual Resident – NHR

Did you know you could enjoy
a decade of generous tax breaks?

You may consider moving to Portugal for a lifestyle change or to soak up some sunshine in your retirement years.
But did you know you could also enjoy a decade of generous tax breaks?
That’s because Portugal offers new residents special tax benefits under the non-habitual resident (NHR) regime.

What is non-habitual residency?

Introduced in 2009 by the Portuguese government to attract ‘high value’ industries and individuals, NHR is effectively a tax holiday for your first ten years living in the country.
If employed in Portugal, non-habitual residents can benefit from a flat 20% income tax rate – a significant reduction on the usual scale rates that reach up to 48%. You can qualify for this rate if you work in one of the pre-defined ‘high value-added’ scientific, artistic or technical professions.
Crucially, the NHR regime can be also be highly beneficial for retirees and other expatriates, as it offers the opportunity to receive foreign income – including pensions – completely tax-free.

  • Tax-free pension income
    No double taxation for pension incomes or for employment and self-employment income obtained abroad.
  • Tax-free foreign income
  • Most income from a foreign source is exempt from Portuguese taxation for 10 consecutive years, as is income that is taxable in another country.

This means that expatriates can potentially receive their pensions, rental income, capital gains on real estate, interest, dividends and non-Portuguese employment income tax-free.
You may escape Portuguese taxation under the NHR scheme because they are taxable in your home country (according to Portugal’s double tax treaty with many countries).

In our experience, most expatriates can save money in tax by moving to Portugal.
We’ve found that our clients who have chosen to retire in Portugal enjoy particularly favourable tax treatment on their investments and assets.

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