Portugal Non-Habitual Resident Investor’s Tax Regime

Portugal Non-Habitual Resident Investor’s Tax Regime

Legislation passed back in 2010 created a tax system more attractive and competitive than other similar schemes implemented in other European jurisdictions.

Portugal’s Non-Habitual Residency (NHR) scheme offers new residents extremely favourable tax benefits for the first 10 years of residency in the country. To qualify you need to become resident in Portugal and must not have been resident there within the last five years.

Under the NHR regime most foreign source income, interest, dividends and certain capital gains can be taken tax-free in Portugal. There are a few exceptions to these rules, for example UK government pensions and UK rental income remain taxable in the UK. Also, Non-Habitual Residents that are employed or self-employed in Portugal in certain professional occupations (deemed “high added value” professions) can benefit from a flat 20% pa income tax rate.

From January 2020 the Non-Habitual Resident regime includes a flat 10% tax on foreign pension income and withdrawals including lump sums. Those individuals who secured Non-Habitual Residency before April 2020 can continue to receive foreign pension income and withdrawals income tax free for the remainder of their first ten years of residency.

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