Tax regime for non-habitual residents
The tax regime for non-habitual residents aims at attracting to Portugal nonresidents engaged in high value-added activities or receiving income from intellectual or industrial property rights or know-how, as well as beneficiaries of pensions obtained abroad. It is applied for a period of 10 consecutive years.
Legislation: Articles 16, 72 and 81 of Código do IRS (Code of Personal Income Tax); Order n.º 12/2010, of 7 January; and information leaflet available on the Portal das Finanças
Who can qualify for the regime
The tax regime for non-habitual residents is applicable to natural persons who comply with the following conditions:
- To have tax domicile on the Portuguese territory in the year of the beginning of taxation under this regime; and
- Not to be considered resident on the Portuguese territory in any of the previous five years; and also
- To request the registration with the regime, electronically, via Portal das Finanças (no later than 31 March of the year following the one in which they become resident in the Portuguese territory).
Benefits
Income obtained in Portugal
Taxation at the special rate of 20% of income from employment (category A) and professional and business income (category B), earned in high value-added activities, with a scientific, technical or artistic nature (identified in Order No 12/2010, of 7 January).
Foreign source income
The foreign source income is exempted, in the following terms:
Income from employment (category A), provided that any of the following conditions are met:
- The income must be taxed in the other contracting State in accordance with the convention to eliminate double taxation concluded by Portugal with that State, or;
- The income must be taxed in the other country, territory or region, when there is no convention, provided that the income, in accordance with the criteria set out in Article 18 of Código do IRS (Code of Personal Income Tax), is not considered to be obtained in the Portuguese territory.
Tax incentives for investment in Portugal
Income of Category B, connected with high value-added activities of scientific, technical or artistic nature or from intellectual or industrial property, or even earned for providing information relating to experience in the industrial, commercial or scientific domains, as well as of category E (capital), F (immovable property), G (gains), when any of the following conditions are met:
- Tax payers might be taxed in the other contracting State, in accordance with the convention to eliminate double taxation concluded by Portugal with that State;
- Taxpayers might be taxed in the other country, territory or region, in accordance with the Model Tax Convention on Income and on property of OECD since it does not appear on the list approved in Order No 150/2004 of 13 February (list of tax havens), and the income must not be regarded as obtained on the Portuguese territory, according to the criteria laid down in Article 18 (1) of Código do IRS (Code of Personal Income Tax).
Income from pensions (category H), when any of the following conditions are met:
- The income must be taxed in the other contracting State in accordance with the convention to eliminate double taxation concluded by Portugal with that State, or;
- The income, in accordance with the criteria set out in Article 18 of Código do IRS (Code of Personal Income Tax) is not considered to be obtained in the Portuguese territory.
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