For a period of 10 years, the non-habitual resident will benefit from IRS (Personal Income Tax) exemptions on foreign source income and a 20% flat rate of taxation on labour and self-employed income sourced from high-value activities.
Sources of income classed as high-value activities are often those of a scientific, artistic or technical nature including:
- Artists, actors, and musicians
- Auditors
- Doctors and dentists, teachers and psychologists
- Engineers
- Liberal professions, technicians, and similar
- Investors, directors, and managers, when part of companies covered by the contractual regime provided for in the Investment Tax Code.
There is no IRS taxation for employment income abroad, and as long as it´s taxed in the country of origin. Foreign sourced income derived from self-employment, such as personal services or freelancing, is exempt from IRS as long as it is taxed in the country of origin and is classed as a high-value activity. For income sourced from self-employment abroad, that doesn´t fall into the high-value category,
As of April 2020, those who receive a pension and want to become tax residents in Portugal to benefit from NHR status will have their pension taxed at a flat rate of 10% in Portugal.
To acquire non-habitual resident status you will need to fulfill a certain set of criteria:
1- You must not have been resident in Portugal for the last 5 years;
2- Apply to become a resident in Portugal; either by obtaining a residence permit (non-EU citizens) or a residence certificate (EU citizens)
3- Register with Finanças as a tax resident in Portugal;
The application for non-habitual residency is done online through finanças. For ease and peace of mind, you can work with a professional who can take care of the whole process for you.
Registration as a Non-Habitual Resident offers these benefits for a period of 10 years, from the year of registering as a tax resident in Portuguese territory.