TAX REGIME FOR NON-HABITUAL RESIDENTS (NHR)

Tax regime for non-regular residents, created on September 23 by decree of law no. 249/2009 articles amended 16, 22, 72 and 81 of the Income Tax Code of Individuals (CIRS). Order no.12/2010 of January 7, complements the application of the regime and law no.20/2012 of May 14 updated its wording. This scheme is applied to income tax payers for natural persons (IRS) who have not resided in Portugal for tax purposes in the last 5 years, and have transferred to the territory Portuguese their tax residence from 2009. This is a small introduction of the rules on taxation to the income tax of individuals (IRS).

1. Scope

Based on a favorable personal income, the objective is to attract to Portugal non-resident citizens, qualified and with a higher level of wealth or with purchasing power. This attraction is based on the application of an exemption method, preferably method of the international elimination of legal double taxation of foreign origin and is applied a rate of 20% (mitigated and proportional taxation) to certain forms of income.

2. Concept

To obtain the quality of regular non-resident, it is necessary to:

a) To be a tax resident in Portugal: a tax resident in Portugal is someone who stays in Portugal, a certain time, more than 183 days (consecutive or not consecutive) or someone who has stayed less time, but who on December 31 of the same year has purchased a property and demonstrates that he intends to live and stay on the property.

b) To request this scheme, the individual may not have been resident we last 5 years. You just have to show that you have not met the requirements to be part of a tax regime during the past 5 years.

This scheme is also applied to emigrants who wish to return to Portugal.

The taxable person, a non-regular resident, obtains the right of taxation for a period of 10 consecutive years, from the year of registration as a resident Portuguese, having to meet all the residence requirements annually.

This application should include a criminal record on your behalf when applying for a residence certificate. This certificate allows you to be considered a resident in Portugal until March 31st of each year.

3. Who can order?

Non-residents who are willing to permanently settle in a residence in Portugal, or wish to return after a minimum of 5 years (i.e. independently for professional reasons, pensioners, and dependent workers). Or non-residents who wish to establish themselves as temporary residents as a result of a posting (i.e. independently of professionals, employed persons, members of an official body).

4. Income tax regime

4.1. Income from Portuguese sources

By choice, category A and B income may not be included, as these are created for high-value activities such as architects, engineers, artists, actors, musicians, auditors, tax consultant, doctor, dentist, teacher, investor, administrator, manager, senior executive, as specified in order 12/2010 of 7 January.

4.2. Income from foreign sources

Income from foreign sources – depends on work – are exempt from taxes in Portugal provided that they are taxed at the place where they provide the source of income and prove that this income is not obtained in Portuguese territory. Income from foreign sources – pensions – are exempt from taxation in Portugal, provided that they are currently taxed in a foreign place, provided that it is not obtained in Portuguese territory.

5. Other requirements

• Obtain the tax identification number from the finances;
• Get a Portuguese bank account;
• With regard to the registration of social security services, it is only necessary to make this registration if the income of a regular non-resident belongs to category A or B in Portugal. Accordingly, if not covered by social security, the non-resident must have a valid health insurance card with accident protection, or alternatively, must have a European health card (in case of European citizens) in this way, will be adequately protected in the event of an accident in Portugal.