Portugal's Non-Habitual Residency Scheme

27 Jul 2023

Portugal could be the perfect destination if you're contemplating moving somewhere that offers a blend of history, beautiful landscapes, and an attractive fiscal regime. Portutax is one of the Gibro Group’s Independent Associated Businesses and has delivered tax and accountancy services in Portugal since 2001. Here’s a summary of Portugal's Non-Habitual Residency (NHR) scheme, which was introduced to attract foreign residents.

Why Portugal?

Situated on the Iberian Peninsula, Portugal is a member of the European Union and the Schengen Area, offering a stable political environment and a thriving economy. With its temperate climate, diverse culture, and affordable living costs, it's no wonder why many UK expatriates choose Portugal as their new home.

About Non-Habitual Residency (NHR)

Introduced in 2009, the NHR scheme is an enticing magnet for foreign individuals looking to establish their tax residency in Portugal. Let's delve into its salient characteristics:

Tax Exemptions

Under the NHR scheme, qualifying individuals may benefit from tax exemptions on various foreign-sourced income streams. This includes dividends, interest, and royalties. Such exemptions can lead to substantial tax savings and enhance your financial well-being during your residency in Portugal.

Reduced Tax Rates

Professionals engaged in "high-value-added activities" may enjoy a flat income tax rate of 20% under the NHR scheme. This reduced rate applies to specific professions and skilled services, making it an attractive proposition for qualified individuals seeking to make Portugal their new tax home. Income on foreign pensions is taxed at 10%.

Exemption Period

The allure of the NHR scheme lies in its extended benefit period. Once you register as a tax resident in Portugal, you can enjoy these advantages for ten consecutive years, offering unparalleled long-term financial stability.

Double Taxation Treaties

Portugal maintains a network of double taxation treaties with numerous countries, safeguarding against the possibility of income being taxed twice on earnings from these jurisdictions. This ensures a seamless and hassle-free tax experience for NHR beneficiaries.

Importance of Professional Support

While Portugal's NHR scheme could fit your requirements, navigating its intricacies can be daunting, particularly for those unfamiliar with Portuguese tax regulations. To ensure you maximise the benefits and comply with all requirements, seeking professional support is paramount. The experienced team at Portutax will guide you through the entire process, providing tailored advice to suit your unique circumstances. With our expertise, you can confidently embrace your new tax residency in Portugal.

Disclaimer

The following blog post ("Post") is provided by The Gibro Group and its independent associated businesses ("we," "us," or "our") for informational purposes only. The content of this Post is not intended to be and should not be construed as financial advice. We are not financial advisors, and the information presented in this Post is not a substitute for professional financial advice.

The information in this Post is based on publicly available data and our understanding of the subject matter as of the date of publication26/07/2023]. While we make every effort to ensure that the information provided is accurate and up-to-date, we do not guarantee its accuracy or completeness. The financial landscape is subject to constant change, and it is essential to consult with a qualified financial advisor or professional before making any financial decisions.

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