Non-Habitual Resident (NHR) tax regime in Portugal
The Non-Habitual Resident (NHR) tax regime in Portugal is designed for individuals who are not considered habitual residents in the country and allows for the following benefits:
- A tax rate of 10% on foreign pension income
- Tax exemption on foreign-sourced dividends, interests, and royalties
- Tax exemption on foreign-sourced self-employment income in high-value added categories
Moving to Portugal and starting a new business can be a great opportunity. While many people may consider Portugal a destination primarily for retirees, it can also be a potential location for those looking to start an online business and take advantage of favorable tax conditions. The NHR program allows individuals who are non-habitual residents in Portugal to benefit from a flat tax rate of 20% for 10 years.
There are several advantages to participating in the NHR program, including the ability to develop personal projects and increase wealth while remaining in an EU state that is not on the black list for individuals transferring residence. The main feature of non-habitual resident status is a tax rate of 20% for 10 years, with a straightforward process for submitting an application. In this article, we will explore how to move to Portugal and take advantage of the NHR program, as well as the benefits it offers.
Some of the benefits of the NHR program in Portugal include:
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Taxation of income earned in Portugal: Individuals who participate in the NHR program are subject to a tax rate of 20% on income earned in Portugal for a period of 10 years.
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Taxation of foreign income: The NHR program provides tax exemptions on foreign-sourced income for individuals in the following categories:
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A: Foreign-sourced employment income
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B: Foreign-sourced self-employment income
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Foreign-sourced pension income
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Passive foreign income: The NHR program also provides tax exemptions on passive foreign income, such as dividends, interests, and royalties.
One notable feature of the NHR program is that virtual currencies are not taxed in Portugal. If you are considering moving to Portugal and participating in the NHR program, there are a few steps you will need to take. The process for becoming a non-habitual resident in Portugal includes submitting an application and meeting certain requirements, such as demonstrating that you do not have a tax domicile in any other country.
To maximize the benefits of the NHR program, it is important to be well-prepared. This includes seeking advice from a tax consultant and understanding the requirements and limitations of the program. Additionally, it is important to be aware of double taxation conventions and how they may impact your tax liability as a non-habitual resident in Portugal.
Overall, the NHR program in Portugal can provide significant tax advantages for individuals looking to move to the country and start a new business or develop personal projects. With careful planning and professional guidance, you can take advantage of this opportunity and enjoy all that Portugal has to offer.
It's important to note that these programs and requirements may change over time, so it's always a good idea to consult with a qualified lawyer.
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