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Luximos Christie's International Real Estate
Portuguese Non-habitual
Residents Regime

Competitive advantages:

  • No double taxation for pension incomes or for employment and self-employment income obtained abroad.
  • For a period of 10 years, taxation related to IRS (personal income tax) on labour income in Portugal is at a fixed rate of 20%

Retired foreigners who wish to establish permanent residence in Portugal and did not have tax residence in Portugal in the previous five years, enjoy a total tax exemption for a period of 10 years.
Those who benefit from a pension paid in a country with which Portugal has established double taxation agreement, will no longer pay taxes in their country of origin because is now a Portugal habitual resident and also will not pay taxes in Portugal under the special legal exemption.

Under the regime’s rules, employment and self-employment income derived from “high value-added activities of a scientific, artistic or technical nature” (included in a list of activities published by the Portuguese Government) earned by non-habitual residents in Portugal will be taxed at a flat rate of 20%.

Additionally, the regime also establishes a tax exemption for foreign-sourced income, such as, employment income, self-employment income, rental income, interest, dividends as well as other investment income, under certain specific conditions.

There shall be considered as resident in the Portuguese territory any person who, in the year to which the income relates:

  1. Stays there more than 183 days, with or without interruption;
  2. Having stayed there for less than 183 days, has at his own disposal on 31 December of that year a dwelling place in such conditions that it may be inferred that there is the intention to keep and occupy it as an habitual abode;
  3. Be a member of a family unit, since whom, the 31 December of the year that the income relates, one of the elements of this family unit is considered a resident for tax purposes in Portugal.

Furthermore, tax wise, Portugal offers extraordinarily comparative advantages, namely:
No gift tax; No inheritance tax (between parents, sons, grandsons and husband and wife).

This information is not intended to be a substitute for consulting the applicable legislation.

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