Based on a favourable tax regime, is intended to attract to Portugal non- habitual tax residents, who are professionals qualified for activities with high added value, as well as individuals with a high net worth or purchasing power.
The Portugal non-habitual resident's regime is applicable to individuals qualifying as Portuguese tax residents, that have not qualified as such in the five years preceding the request to benefit from this regime.
An individual qualifies as a tax resident in Portugal if:
• the person spends 183 days or more in any 12 months period; or,
• the person has a residential accommodation available on any day of the above mentioned period, suggesting that it is their habitual residence.
Under the special regime, employment and self-employment income obtained in Portuguese territory, deriving from high technical activities by non-habitual residents are taxed at a special 20% flat rate.
Additionally, foreign sourced employment income and self-employment income deriving from high value added activities, royalties, investment income, rental income, net worth increases (including capital gains) and pension income are, as a general rule, exempt under the Portugal tax regime for non-habitual residents.
This scheme has been particularly popular with foreigners in particular pensioners, where a tax exemption exists on their income source.
Exempt if taxed in the source state.
Professional Income (from high value-added activities)
Real Estate Income
(i) the income is taxable in the source state (excluding tax havens) according to the applicable tax treaty concluded between Portugal and the source state; or
(ii) in cases where there is no tax treaty in place, the income is liable to tax in the source country according to the OECD Model Tax Convention on Income and on Capital (tax havens excluded).
Exempt if not considered as obtained in PT territory or taxed in the source state according to a DTA.