Status of non-habitual residents
For the citizens who are abroad and want to come and live in Portugal, there is a special tax regime. For those who are foreigners and want to live in Portugal, the tax authorities have a special income tax regime. This regime was approved in 2009 and gives some tax advantages, for a period of 10 years, to persons applying for tax residence in Portugal. The purpose of this special regime is to attract qualified non-resident professionals in activities with high added value or intellectual and industrial property, as well as beneficiaries of pensions obtained abroad.
In March 2020 the status of non-habitual residents had close to 30 thousand beneficiaries.
The enrolment as a Non-Habitual Resident gives you the right to be taxed as such for a period of 10 years, as a tax resident in Portuguese territory, at a fixed rate of IRS of 20% on labor income earned in Portugal. This 10-year period is non-extendable.
Pensioners benefit from a reduced rate of 10% tax. Pensioners retired from another country have the possibility to take advantage of the IRS exemption – if there is a Double Taxation Agreement and this gives the country of residence (Portugal) the right to tax it.
Non-resident citizens in Portugal who are willing to establish domicile in our country, or want to return after a minimum period of absence of 5 years.
Non-resident citizens in Portugal who wish to establish themselves as temporary residents, as a result of secondment relationships.
Check table of Ordinance No. 230/2019 of 07/23/2019, which catalogs the activities that are considered of added value for the labour market in Portugal.
The following people are members of the household:
- Spouses not legally separated from persons and property, or de facto partners, and their dependents;
- Each of the spouses or ex-spouses, respectively, in the case of legal separation of persons and property or declaration of nullity, annulment or dissolution of the marriage, and dependents;
- The single parent or dependents;
- The single adopter and dependents.
How to obtain the Non-Habitual Resident status
Being a tax resident in Portugal, staying in Portuguese territory for more than 183 days (consecutive or interpolated) throughout the year. This permanence is provable by presenting the deed of purchase of property, or by presenting a lease agreement with the duration of 6 months or more.
Not being classified as a tax resident in Portugal in the last 5 years prior to the application of the regime.
The application for registration as a non-habitual resident must be made until March 31st of the year following that of your entry as a resident in Portugal.
The RNH application should only be made after you have obtained your registration as a resident in the Portuguese territory. If you already have a tax identification number (TIN) but are still registered as a non-resident – you must arrange to change your address and resident status. The order must be placed in a Finance service or Citizen’s Shop.
You can request this registration through the Finance Portal or application. You should request, on the Finance Portal, www.portaldasfinancas.gov.pt, after you have registered as a resident in the Portuguese territory, the respective password and fill in the membership form with the requested data.
After receiving the password at your address, you can submit the application for registration on the Finance Portal, by filling in the fields for the year in which you want to start the registration, as well as the country of residence abroad (country where you lived in the last year) and declare that it meets the conditions to be considered as non-resident in Portuguese territory in the five years prior to the year intended for the beginning of the status as non-habitual resident.
Dependent or self-employed work (Applicable tax rate 20%)
Taxation is levied on income from activities of high added value with a scientific, artistic, industrial or technical character:
- General directors and executive managers of companies;
- Directors of administrative and commercial services;
- Production and specialized service directors;
- Directors of hotels, restaurants, commerce and other services;
- Specialists in the physical sciences, mathematics, engineering and related techniques;
- Doctors, Dentists and Stomatologists;
- University and higher education teachers;
- Specialists in information and communication technologies (ICT);
- Authors, journalists and linguists;
- Creative and performing arts artists;
- Intermediate science and engineering technicians and professions;
- Information and communication technology technicians;
- Farmers and skilled workers in agriculture and animal production;
- Skilled market-oriented forestry, fishing and hunting workers;
- Skilled workers in industry, construction and craftsmen (metallurgy, metalworking, food processing, wood, clothing, crafts, printing, manufacture of precision instruments, jewelers, artisans);
- Electrical and electronic workers;
- Plant and machine operators and assembly workers.
(The professionals Auditors, Tax Consultants, Psychologists and Archaeologists were eliminated from the RNH 2020).
Activities with high added value
Evidence of activities with high added value (EVA) by taxpayers under the RNH regime:
- Work or service contracts that objectively identify the functions performed, accompanied by a document proving enrolment in a Professional Order (if applicable);
- Document proving the exercise of the position of management and power of attorney in which it is stated that it has powers to bind the legal person, in the case of the activity “Senior Management Company” (a proxy with joint powers is sufficient proof);
- Documents proving the respective qualification as an investor, administrator or manager and that the company is affected by the type of eligible projects, in the case of the activity of “Investors, administrators and managers of companies promoting productive investment, as long as they are allocated to eligible projects and with contracts granting of tax benefits under the Investment Tax Code”;
- In the case of partners and managers, they must be analyzed;
- In the case of independent activities, declaration of commencement of activity with indication of the code in the Table Attached to the IRS or CAE Code compatible with the code in the EVA professions table, as well as the description of invoices issued, accompanied by a document proving enrolment in a Professional Order;
- Other suitable documents that prove the effective exercise of the activity invoked.
The verification of the exercise of activity of high added value invoked in the declaration of income occurs through the evidence to be presented by the taxpayers after the declaration is delivered, when and if requested by the services of AT. Thus, the taxpayer must be provided with the supporting evidence of the effective exercise of these activities and the corresponding obtaining of income, as well as the other legal assumptions of the right that he invokes in any of the years, of the maximum period of ten years, in which he can enjoy the RNH status, and proceed to the respective presentation whenever requested by AT services.
- Obtain the Portuguese Tax Identification Number, from the Tax and Customs Authority;
- Opening a bank account in Portugal;
- Registration in Social Security, it is important to note that it is only mandatory if the non-resident earns income in category A or B in Portugal;
- To have health insurance valid in national territory.
Lawyer Fees and Expenses
- Expenses / Opening of Dossier (Initial Order) – € 1,250 (thousand two hundred and fifty euros).
The fee amount does not include notary or registration fees, taxes or other expenses incurred on behalf of the Client.
- Asset management and maintenance advice;
- Elaboration / verification of lease agreements or other type;
- Performance with government departments or services;
- Representation of the owner client with condominium administrations.
Expenses on account of the client:
- Notary fees (purchase deed) – Approximate Value € 500 (five hundred euros);
- Registration of title of acquisition of property at the Land Registry Office – Approximate Value € 350 (three hundred and fifty euros);
- Opening a bank account in Portugal € 250 (two hundred and fifty euros);
- Municipal Tax on Transfer of Real Estate (“IMT”);
- Stamp tax 0,8%;
- Property tax (“IMI”) Applicable rate between 0,3% e 0,5% (Urban Buildings) 0,8% (Rustic Buildings) Incidence on the tax equity value of the property;
- International Health Insurance Variable according to the beneficiary’s personal conditions.