FA Legal Online

Non-Habitual Resident – Favored Tax Regime

The Investment Tax Code, approved by Decree-Law no. 249/2009 of September 23, created the Tax Regime for the Non-Habitual resident though the Income Tax, aiming to attract to Portugal non-resident qualified professionals in activities of high value added or of intellectual and industrial property or know-how, as well as pension beneficiaries obtained abroad.

A citizen can request the enrollment as a non-habitual resident if he satisfies the following conditions:

To be considered, for tax effects, a resident in Portuguese territory according to any of the established criteria in numbe1 of the article 16 of the IRS Code in the year in which it is intended to begin the taxation as non-habitual resident;
Not to be considered resident in Portuguese territory in any of the five years prior to the year in which it is intended to begin the taxation as a non-habitual resident;
To exercise activities of high value added, with a scientific, artistic and technical character in the terms of Ministerial Order no. 12/2010 of January 7^th.

A citizen who is considered a non-habitual resident acquires the right to be taxed as such in the 10 consecutive years (non extendable period) including and starting on the year of his enrollment as a resident in the Portuguese territory, as long as he is considered a resident in each one of those 10 years.

It is stressed that the enjoyment of the right to be taxed as a non-habitual resident, in each year of the period previously referred, depends on being, in that same year, considered resident in the Portuguese territory.

The net income of the Categories A (contractual work) and B (self-employed work) earned in activities of high value added in the terms of the Ministerial Order no. 12/2010 of January 7^th, by non-habitual residents in Portuguese territory, are taxed at the special rate of 20%, if not exercised the option for aggregation.

Concerning the remaining income of the categories A and B (not taking into account the high value added) and the income of the remaining categories, earned by non-habitual residents, the same included and taxed according the the general laws established by the IRS code.

Non-habitual resident