If you’re considering moving to Portugal or investing in the country, the Non-Habitual Tax Residency program is worth exploring. This tax regime offers significant benefits for eligible individuals, including reduced tax rates and exemptions for certain types of income. Portugal is an attractive destination for expats, and Non-Habitual Tax Residency is one of the reasons why.
Who qualifies for Non-Habitual Tax Residency?
To become a non-habitual resident in Portugal, you must meet certain requirements. First, you must not have been a tax resident in Portugal for the past five years. Additionally, you must spend at least 183 days per year in Portugal. Certain professions, such as artists, scientists, and engineers, may be eligible for a special tax exemption under the non-habitual regime. This exemption applies to income derived from “high added value activities,” which are defined as “scientific, artistic or technical activities.”
How does Non-Habitual Tax Residency work?
Under the non-habitual regime, the tax system is favorable for non-habitual residents in Portugal. The tax rates on Portuguese income are reduced, and certain types of foreign income are exempt from tax. For example, foreign pension income, dividends, and royalties are exempt from tax under the non-habitual regime. This can provide significant tax savings for those who qualify.
In addition to the tax exemptions and reduced rates mentioned above, Portugal does not have a wealth tax or inheritance tax. This can make it an attractive destination for individuals who want to preserve their wealth. Additionally, the cost of living in Portugal is relatively low, which can make it an appealing option for retirees.
Benefits of Non-Habitual Tax Residency
Non-Habitual Tax Residency can provide significant benefits for eligible individuals who are considering living or investing in Portugal. The Portuguese government has introduced this regime to attract high-value individuals and professionals, which can bring economic benefits to the country. The regime has also helped to boost Portugal’s real estate market, which has seen increased demand from international buyers in recent years.
How to apply for Non-Habitual Tax Residency
To apply for Non-Habitual Tax Residency in Portugal, it’s advisable to seek the help of experienced tax advisors. At GrowIN Portugal, we specialize in providing tax advisory services to individuals and businesses in Portugal, including Non-Habitual Tax Residency. Our team of experts can guide you through the application process and help you determine whether you meet the eligibility requirements. We can also assist you in gathering the necessary documents and submitting your application to the Portuguese tax authorities.
Conclusion
Non-Habitual Tax Residency can be an excellent option for eligible individuals who are considering living or investing in Portugal. With reduced tax rates and exemptions for certain types of income, this tax regime can provide significant tax savings. At GrowIN Portugal, we are here to help you navigate the application process and maximize your tax savings. Portugal is a beautiful country with a rich history and culture, and Non-Habitual Tax Residency is one of the reasons why it’s becoming an increasingly popular destination for expats and investors alike.
References:
- “Non-Habitual Resident Regime,” Portuguese Tax and Customs Authority, accessed May 9, 2023
