NON-HABITUAL RESIDENT STATUS

The Non-Habitual Resident is a tax status that is intended for Portuguese or foreign citizens who are already legally resident in Portugal and who also meet the following requirements:

• They have not been considered residents in Portugal in the last five years;
• Be considered residents in Portugal, in the following cases:

a) Staying for more than 183 days, consecutive or interspersed, in any twelve-month period, beginning or ending in the year in question; or

b) Staying for less time, they have, any day of the period of 12 months, a dwelling with conditions that make to suppose the intention to maintain it and to occupy it as habitual dwelling.

ADVANTAGES OF THE NON-HABITUAL RESIDENT

• The net income of categories A (work for others) and B (self-employment), which are part of the exercise of activities of high added value: scientific, artistic or technical, in Portuguese territory by non-habitual residents, are taxed at a rate of 20%.
• Category A income (employment) obtained abroad by non-habitual residents is exempt, provided that, alternatively:

a) They are taxed in the other contracting state, in accordance with the convention to eliminate double taxation entered into by Portugal with that state;

b) Taxed in another country, in cases where there is no convention to eliminate double taxation entered into by Portugal, provided that this income is not considered to have been obtained in Portuguese territory, in accordance with the Personal Income Tax Code.

• The income of category B (self-employment), obtained in activities of rendering services of high added value: with scientific, artistic or technical character, or from intellectual or industrial property, or even from the provision of information on experience acquired in the industrial, commercial or scientific sector; as well as of categories E (capital income), F (real estate income) and G (capital gains), which non-habitual residents obtain abroad, will be exempt, provided that, alternatively:

a) They may be taxed in another contracting state, in accordance with the convention to eliminate double taxation entered into by Portugal with that state;

b) They may be taxed in another country, in cases where there is no convention to eliminate double taxation concluded by Portugal, in accordance with the rules defined in the OECD model tax convention on income and wealth, provided that (i) it is not a territory subject to a privileged taxation regime (defined in a ministerial order) and (ii) provided that the income is not considered to be obtained in Portuguese territory, in accordance with the Personal Income Tax Code.

• Net pension income obtained abroad by non-habitual residents, to the extent that such income, when originating from contributions, has not been considered as a tax deduction in Portugal, is taxed at a rate of 10%.