WHAT IS NHR NON-HABITUAL RESIDENT STATUS?
The non -Habitual resident status or NHR was created by Portugal to attract foreigners and non-resident professionals. The purpose of this new status is to attract foreign pensioners or skilled non-habitual residents. Under certain conditions, the NHR status allows a tax rate on income of 20% or even a total tax exemption for almost all income from foreign sources.
CONDITIONS TO BENEFIT FROM NHR STATUS
The NHR scheme is granted to persons who become resident and provided they have not been taxed in Portugal during the five years preceding the application. A tax residence certificate can be requested. These 2 conditions are ultimately simple, the most complicated being to prove it.
How can a person Qualify as a non-habitual resident?
• Having lived more than 183 days (consecutive or not) in Portugal during a 12-month period beginning or ending in the year of application for NHR status; If you have lived in Portugal for a period less than 183 days, you must have a home by 31st December of that year that has been fully lived in as a principal residence.
• A person who qualifies for non-habitual resident NHR status in Portugal must file the complete application until 31 March of the year following the year of registration as a Portugal tax resident. Any late requests may be denied their application for NHR status.
The tax regime NHR in Portugal is granted for a period of 10 years non-renewable, as long as the individual continues to be considered as tax resident in Portugal during each of these 10 years. If for a year the person is not recognized as a tax resident in Portugal, then his status is not lost. In fact, a person who has not been able to benefit from the NHR plan during this 10-year period can always return and benefit from the plan during any of the remaining years of that period, beginning in the year in which he or she becomes a tax resident again in Portugal. Attention years are not postponed later.