Non-Habitual Resident Tax Regime
The journal Mundo Português publishes article "The Tax Regime of Non-Habitual Resident" in the edition of 16/10/2020 by Vanessa Mendes, CEO of Be Wise Consultant. Read the full article:
16th October 2020.
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Much has been said about the tax regime of Non-Habitual Resident (NHR) in the last decade, being pointed out, by many, as an attractive tax regime for foreigners who change their tax residence to Portugal. However, there is still doubt about the use of this regime by Portuguese people who are currently living outside their country.
It is important to step back a little, before answering this question, and to address some of the advantages of this regime so “appreciated” and “desired”. We are in the presence of a regime that, in the first place, aims to attract “big brains”, pensioners and investors to the national territory in order to foster the competence, on the one hand, of our professionals and, on the other, to capture the interest of pensioners who want to enjoy an exceptional climate, good food and a lot of friendliness! We associate an equally important factor with all the ones stated above: reduction of the tax burden.
Therefore, the NHR regime allows those whose residence in the last 5 years has been located outside the national territory to apply, for a period of 10 years, for a reduction in the tax rate on lower earned income (20% for high-income with added value activities) to what would be applied in the current countries of your residence, benefiting from the method of exemption for income earned abroad.
It should also be noted that pensioners may, provided that at the date of entry into force of the law (which changes the regime for taxing pensions), they are considered to be resident for tax purposes and apply for registration as an NHR until March 31, 2020 or 2021, benefit from total tax exclusion on your pensions.
As we can see, the regime does not distinguish between nationalities, but it does place its emphasis on residence, that is, it is enough that, regardless of nationality, one has not resided in Portuguese territory in the last 5 years to benefit from the regime.