Guide - What are the tax benefits of the NHR programme in Portugal?

Non-Habitual-Residency (NHR) Programme:

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The NHR programme offers a flat tax rate of 20% on eligible income, such as foreign-source income, professional income, and pension income.  There is also a tax exemption on certain types of income, such as dividends, interest, and capital gains.

Tax Exemption: Non-Portuguese-source income and certain foreign-source income are exempt from personal income tax (IRS) for a period of ten consecutive years. This includes income from employment, self-employment, dividends, pensions, capital gains, and rental income.

Reduced Tax Rates: For Portuguese-source income, such as income derived from employment or self-employment in Portugal which can be highly advantageous compared to regular tax rates.

Pension Taxation: Foreign pensions can also benefit from a 10% flat tax rate instead of being taxed at the normal progressive rates.  Internationally progressive tax rates on pensions range between around 28-50% so the NHR programme is seeing significant traction and adoption from people wishing to move their tax residency to Portugal.

Double Taxation Agreements: Portugal has signed Double Taxation Agreements (DTAs) with numerous countries to ensure that income is not taxed twice, further reducing the tax burden for NHR individuals.

High-Value Professions: The NHR programme is particularly attractive for professionals in high-value sectors such as research and development, technology, finance, and entrepreneurship and senior roles within management. These individuals can benefit from the favourable tax regime while pursuing their careers in Portugal.

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Disclaimer: The information on the Portugal Pathways website and in email communications is for general informational purposes only and should not be construed as legal, tax, or financial advice. You should consult and check with a qualified professional advisor before relying on any information provided on this website or in email communications. As it relates to investments in Golden Visas or other wealth management solutions offered by regulated and professional advisors, it is important to note that past performance is no guarantee of future returns. Private equities can be highly illiquid and come with risk and should always be under professional independent advice.

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