Whether for foreigners who wish to settle and live in Portugal, or for Portuguese emigrants who wish to return to their country of origin, there is a special personal income tax (PIT) regime that offers various tax opportunities for passive income, pensioners and people in high value-added professions.
If you have not been a tax resident in Portugal for the last 5 years and wish to become one, you can join the Non-Habitual Resident (NHR) regime which offers you the benefits detailed below.
Tax benefits :
- Flat rate of 20% for salaried employment income (category A) and self-employment income (category B) earned in Portugal from high value added activities.
- Employment income earned outside Portugal is not taxable in Portugal if it is taxed in the country of origin.
- Self-employment income earned outside Portugal from a high value-added activity is not taxable in Portugal, provided that the income can be taxed in the country of origin under a tax treaty signed between Portugal and the respective country.
- 0% tax on interest, dividends and royalties obtained outside Portugal, and if taxed in the countries of origin, the respective taxation will not exceed the reduced rates established in the tax treaties signed between Portugal and the respective countries, which vary between 5% and 15%.
- Foreign pensions subject to a fixed rate of 10%.
- The tax regime is granted for a period of 10 years with the possibility of suspension and resumption of the regime.
Other Tax Benefits :
- In Portugal, there is no wealth tax. However, you have to pay the AIMI (additional tax on real estate). The amount of this tax is between 0.4% and 0.7% of the value of all real estate for residential use or land for construction, owned by individuals or companies, with a value of over €600,000.
- Donations and inheritances are completely tax-free between ascendants, descendants and spouses. For other beneficiaries, a stamp duty rate of 10% applies.
- The sale of foreign goods is not subject to stamp duty.
- Exemption from capital gains tax on the sale of one’s own permanent residence, provided that the income is reinvested in another permanent residence in Portugal, the European Union or the European Economic Area.
- Tax exemption on income or gains derived from crypto-currencies.
- Tax exemption on capital gains from the sale of valuable second-hand goods: works of art, cars and other collectibles.
Who can apply for Non-Habitual Resident status?
Individuals, foreign or Portuguese, who have not been resident in Portugal for tax purposes for the last 5 years.
Individuals who are considered to be resident for tax purposes in Portugal in the year in which they wish to apply for NHR status. For tax purposes, the following are considered resident in Portugal
– an individual who has stayed in Portuguese territory for more than 183 days; or
– having stayed for a shorter period of time, on 31 December of that year, have a house on Portuguese territory in conditions that suggest the intention to maintain and occupy it as their habitual residence.
VB REAL ESTATE will assist you in the steps necessary to obtain the RNH (non-habitual resident) status.
