The Portuguese Non Habitual Resident regime (NHR) has been attracting both pensioners and high level professionals who are benefiting from reduced taxes.
Under this scheme professionals are paying a flat rate of 20% on their salary or self-employed income received in Portugal whilst pensioners are enjoying their tax exemptions!
In addition such individuals are exempt in Portugal from paying tax on their non-Portugal income of all categories which includes pensions, self-employment, real estate, capital income and capital gains. This exemption applies to the income, if the source country taxes the relevant income under the terms of a Portuguese Double Tax Treaty (DTT) celebrated with that country, or if the income is taxed in the other country and is not considered as obtained in Portugal.
To qualify you cannot have been registered in Portugal as a tax resident in the preceding five years. Many individuals are not aware that they were automatically registered as tax residents of Portugal if they applied for their fiscal numbers prior to 2002. If your IMI property tax bill is sent to your Portuguese property address you are definitely registered as a resident and you should review this situation if you are in reality a non-resident of Portugal!
Sovereign is able to assist you with the NHR applications which must be submitted within a specific deadline and you can then enjoy tax benefits for 10 years!
Certain professional activities qualify for the NHR and it should be noted that any income earned in the 81 territories listed on the Finance Department list of preferential tax regimes – the so called “blacklist” would not qualify for this regime.
The right tax advice is essential to benefit from tax savings and most importantly to avoid falling foul of the Portuguese tax department!
Sovereign - Consultoria Lda can assist you with the application process which may be somewhat arduous and require close liaison with the tax department. Following acceptance by the tax department Sovereign can help you with tax advice and your declaration of income on an annual basis.
Contact Sovereign for more information.