Non-Habitual Resident status:
The Non-Habitual Resident Statute applies to Portuguese who wish to return to the country and to foreigners who decide to come to Portugal. This status has associated tax advantages.
See what this statute consists of, who can apply for it and what you get out of it.
What is non-habitual resident status?
In practice, the Non-Habitual Resident Statute is a specific tax regime for income taxation valid for a period of ten years.
Who can apply for the statute and what are the requirements?
Portuguese citizens who are in another country can apply for the Non-Habitual Resident Status and wish to return to Portugal and foreigners who decide to live in Portugal.
Whatever the nationality, there are mandatory requirements for them to be granted the said status.
- have not been taxed as a tax resident in Portugal in the five years preceding the application for the statute;
- To be registered as tax resident in Portuguese territory. And it is only so considered if it has remained in Portuguese territory more than 183 days, even if they are not followed. If you do not meet this minimum period, you must have housing in Portugal that demonstrates your intention to remain in the territory.
Stay on top of part-time IRS residency.
To avoid double taxation of income it may be important to apply for the tax residence certificate.
Learn how to fill out the IRS as an unusual resident with high added value activity.
When to apply?
Once the mandatory requirements have been met, the Non-Resident Resident Status can be requested once you register as a tax resident. Or at a later time, until March 31 of the following year.
Then, on average, it takes six months to know if the Portuguese tax authorities have granted the status.
Advantages of non-habitual resident status:
The citizens to whom this status is recognized will have their income taxed under a special regime for ten years. During this period, they benefit from the following tax advantages:
- Labor income earned in Portugal subject to a fixed IRS rate of 20% (plus a 3.5% surcharge);
- If they earn income abroad - whether dependent, self-employed or pension - they will not be subject to double taxation.
This latter capital gain is only applicable when income from the activities of high added value provided for in Ordinance no. 12/2010, of January 7.