NHR tax status applications must prove intent before the December 2023 deadline
After weeks of uncertainty, the Portuguese government has confirmed its hugely popular Non-Habitual Residency (NHR) tax regime will continue until the end of 2024 – but only to those who have already started their application.
It which offers beneficial tax rates for up to 10 years for successful applicants. It was introduced in 2009 and was designed to attract wealthy investors to Portugal.
It proved a huge success within excess of 72,000 making the move. But it prompted fears, domestically, it was driving property prices out of the reach of locals.
As a consequence, the government had announced the curtain was to fall for new applications at the end of 2023. But when Portuguese Prime Minister António Costa resigned in October amid a corruption probe, the proposed legislation, spearheaded by his Socialist Party (PS Party) was thrown into disarray.
However, ahead of a General Election in March, Portugal’s parliament has now extended the NHR tax regime for foreign residents until the end of 2024. It comes, however, with caveats.
Under the agreed extension, applicants must prove they had already started planning their journey to move to Portugal during 2023.
That means providing proof of a job offer or property agreement dated before the end of December.
This could include proof of address such as property ownership in Portugal, a rental agreement, utility bills, a Portuguese bank account, or a NIF tax ID. If you are a non-EU citizen, it means providing proof you have an immigration appointment, a residency card, or alternatively a letter of intent.
While it finally ends the uncertainty, it will however leave many keen for clarity on what it means to them.
To that end, Portugal Pathways, which supports people seeking a new life in Portugal by advising on how best to structure their life, income, tax and assets to ensure a smooth transition has created a free easy-to-follow guide as to exactly what the new legislation means.
Crucially, it provides details of exactly what will be accepted as proof for those planning to make a life in Portugal.
Steve Philp, partnership director of Portugal Pathways said: “The recent uncertainty surrounding NHR tax status deadlines for new entrants has been unsettling, so it's reassuring that individuals who have demonstrated a genuine intention to relocate to Portugal will still be eligible for NHR tax status, provided they can furnish the necessary documentation and proof of intent outlined by the Portuguese government.
“Many had made huge investments of time and money into their planned move but had been thrown into uncertainty. This gives them confidence they can proceed as planned.
“However, many people will still have plenty of questions as to just what the new legislation means to them.
“Whether they are in the process of making the move or existing NHR tax regime beneficiaries, there will be many needing reassurance, or guidance, as to exactly what it is they need to do.
“The Portuguese government has also not yet fully announced the details of what it proposed previously as the replacement for the NHR tax regime, which it tentatively named the Incentivised Tax Scheme (ITS) in draft announcements.
“It is likely that the new tax regime will have similar benefits as the current NHR tax status, but there will inevitably be some impact from these changes.
“Our guide looks at all these issues and lights the way for those wondering just what they need to do next.
“What is worth saying, though, is that there are very few professional supply chain partners who are taking on brand new applications before the end of December so this is very much for those who already in the middle of their application process for NHR tax status before the end of December deadline.”
For further information please contact steve.philp@portugalpathways.io
Fishing boat capsizes at Armação de Pêra
A fishing vessel, with a 43 year old Portuguese fisherman onboard, capsized yesterday morning near the coast due to the force of a wave, on Vale do Olival beach in Armação de Pêra.
Luckily the boat was near the shore, so the man managed to swim ashore.
A member of the public, who was on the beach, alerted Portimão Maritime Police at 10:35 am and the crew from the Ferragudo Lifeguard Station were immediately called to the scene.
The National Maritime Authority later said in a statement that “the fisherman reached land by his own means, with the crew from the Lifeguard Station refloating the vessel, which was later towed to the beach with the support of the Armação de Pêra Fishermen's Association”.
“Worst ever” water shortages mean “difficult measures” as early as January
The water shortage in the Algarve is the “worst ever” and if this scenario continues, at the beginning of 2024 it may be necessary to impose limits on consumption.
The vice-president of the Portuguese Environment Agency ( APA ) admitted yesterday that the “Algarve is in the worst situation ever. We have never been like this. This year, the Algarve is worse than last year, it is in the worst situation ever. We've never been like this. It is a new path that we are taking”, stated José Pimenta Machado at the National Meeting of Water Management Entities (ENEG), which started this Monday and runs until Thursday, in Gondomar.
The situation is of “particular concern”, and could “eventually” lead the APA to “take difficult measures”, in January or February, he anticipated, revealing during his intervention that the group of reservoirs in the Algarve region currently accounts for 30 cubic hectometres less than in 2022.
On the sidelines of the event, José Pimenta Machado clarified that APA monitors the water level in the reservoirs daily, and decisions are made based on this analysis.
“Everything has to be evaluated based on water reserves. We are in the middle of winter and it is in winter that the reservoirs recover water. We will have to carry out rigorous and continuous monitoring of the evolution of the level of the reservoirs and then, in January, February, we will have to take measures so that, above all, there is no shortage of water”, he stressed.
The vice-president of APA took the opportunity to point out the control of water consumption and the strengthening of groundwater inspection as possible measures to mitigate water scarcity.
The official also said that the situation in the Mira River Basin, in Alentejo, is similar to the Algarve region, however, in that case, “human consumption is more than safeguarded”.
According to the weekly reservoir bulletin on November 20th, the volume stored increased in 3 river basins in the country and decreased in 12, compared to the previous week.
According to the same bulletin, there are five reservoirs in the country with a storage percentage of less than 20%: Campilhas (6%), Monte da Rocha (8%), Vigia (16%), Arade (15%) and Bravura (8% ), the last two are in the Algarve.
José Pimenta Machado, who participated in a round table on adapting to the new European directives on water, was hoiwever satisfied with the work carried out by the 'task force' created in June to mitigate the effects of drought in the Algarve region. At that time, the Government decreed a reduction in the quota of water for agricultural use and for golf courses by 20% in the Odeleite dam, in Castro Marim. If golf courses have the capacity to reuse wastewater, the limitation increases to 50%.
The measures came at a time when a third of the country was in severe and extreme drought, with the Algarve and Alentejo raising the greatest concerns.
This was confirmed by the vice-president of APA, who said that in some stations in the Cávado and Lima basins, precipitation values in the order of 1,000 liters were recorded: “that is, it rained more in 15 days in that area than it rains in two years throughout the Algarve region”, he highlighted, adding that these phenomena bring added challenges.
The official also recalled that investments are being made in the Algarve region to find alternative sources, such as the project to build a desalination plant in the municipality of Albufeira, which is under public consultation until December 19th.
Public investments of around 342 million euros are also planned from the Recovery and Resilience Plan (PRR) and European funds, to increase water resilience.
4 million doses of drugs seized and 345 detained over the weekend
Shockingly, more than four million doses of drugs and dozens of weapons were seized over the weekend, in a national operation that involved the PSP and GNR, resulting in the arrest of more than 340 people.
In a joint statement, the PSP and GNR explain that in the “Portugal + Seguro 2023” operation, more than a hundred nightlife establishments were also inspected, with 286 administrative offenses registered.
More than 30 reports of administrative offenses and/or crimes were registered, the authorities added, explaining that this operation involved the inspection of nightlife venues and establishments, as well as the consumption and sale of drugs and psychotropic substances to deter crime and promote the reinforcement of the feeling of security.
More than 4,000 members of the PSP and GNR participated in the operation, which allowed the seizure of 4,099,899 individual doses of drugs, including more than four million doses of cannabis, 561 of hashish, 29,984 of cocaine and 655 of heroin.
82 weapons were also seized, including firearms, bladed weapons and ammunition.
The various inspection by PSP and GNR, took place on Saturday and Sunday throughout the vountry, leading to the arrest of 345 people, 85 for drug trafficking, one for possession of a prohibited weapon, 205 for driving under the influence of alcohol and 54 for lack of a legal license to drive.
In the area of road safety, 1,633 administrative offense notices were issued, 526 for speeding, 232 for lack of IPO inspection, 55 for driving under the influence of alcohol, 113 for lack of mandatory insurance, 50 for improper use of a cell phone during driving and 55 for not using a child seat.
In the note released this morning, the authorities say that among the crimes that rose the most this year are those related to violent and serious crime, which increased by 14.4% compared to the last year.
The increase in the number of crimes such as drug trafficking rose 48.1%, driving vehicles with an alcohol content equal to or greater than 1.2 g/l (+ 43.4%), domestic violence (+15%, equivalent to 3,968 more cases), group crime (+18%, 898 more cases) and juvenile delinquency, which increased by 50.6% (567 more situations).
