Portugal Non-Habitual Residency : NHR 2.0

The Non-Habitual Resident (NHR) tax regime offers foreign residents reduced tax rates and exemptions on some taxes. It was initially introduced in 2009 and updated in January 2024.

The NHR  2.0 tax regime is called the Fiscal Incentive for Scientific Research and Innovation (IFICI) Program. Aimed at highly qualified professionals who are moving to Portugal for both employment and residence purposes.

Those who qualify will benefit from a flat tax rate of 20% on eligible professional income arising from Portugal and possibly an exemption on professional foreign-sourced income such as dividends, interest, capital gains, and rents. If the foreign source income is from an external source that has a DTA (Double Taxation Agreement) with Portugal, then the income will not be subject to taxation in Portugal. 

Unlike under the previous NHR program, this excludes foreign pensions, they will be subject to full taxation in Portugal at 14.5% to 53% normal progressive rates.

These benefits will last for a 10-year period and are not renewable.

Individuals must fulfill the following conditions to qualify for the NHR 2.0 :-

• They become tax residents in Portugal 
• They have not been tax residents in the previous five years 
• They earn income in certain professional categories 

You can apply for NHR status in Portugal online at the government website. For this, you need to provide the following:

• A residency permit in Portugal or an EU passport
• Proof of your Portuguese fiscal address (this can be a rent contract registered at the tax authorities in Portugal or your residential property)
• A NIF number (Portuguese tax identification number)

There are specialist tax advisors who can assist in the application and we will gladly arrange this on your behalf,