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The Non-Habitual Resident Status (NHR), which grants IRS benefits to new foreign residents (of any nationality) and Portuguese citizens who have been emigrated for more than 5 years, has been revoked. It has been replaced by the Scientific Research and Innovation Tax Incentive.

However, those who have  registered as Non-Habitual Residents before 1 January 2024 continue to benefit from this regime until the 10-year period (they are entitled to) expires. Those who became residents in 2024 can also still benefit from the status.
In this transition phase, there are many changes and deadlines that are important to know. Find out what is in effect.

 

New registrations ended in March

The Non-Habitual Resident Status has been revoked. However, with the State Budget Law for 2024, a transitional provision is now in place. Access to the status was allowed until 31 March 2025 and to those who became residents in 2024.
Under those conditions, it is still  possible to enjoy the tax benefits for the full period of 10 years, until 2033. That is, the tax regime for non-habitual residents continues to apply for those who:
• On 31 December 2023 had met the conditions for registration as a non-habitual resident;
• Had already become a tax resident by 31 December 2024 and have one of the following elements:

• Promise or employment contract signed by 31 December 2023, with functions occurring in national territory;
• Lease contract or other contract granting the use or possession of property in Portugal signed by 10 October 2023;
• Reservation contract or promise of purchase contract for property in Portuguese territory, signed by 10 October 2023;
• Enrolment or registration of dependents in a Portuguese educational establishment, completed by 10 October 2023;
• Valid visa or residence permit until 31 December 2023; Procedure, initiated by 31 December 2023, for granting a visa or residence permit.

 

 

 

Furthermore, those who were already registered as non-habitual residents in the taxpayer register of the Portuguese Tax Authority (AT) on 1 January 2024 can also continue to benefit from the status until the maximum period of 10 years is exhausted.

 

 

Tax benefits of the NHR status

For benefits on taxation (dependent or independent work) - at a reduced rate of 20% -, the non-habitual resident must exercise a professional activity in portuguese territory considered to be of “high added value”, according to the official list.
In the case of foreign-source income, pensioners are taxed at a rate of 10% on the pension amount and beneficiaries of passive income from categories E (capital), F (property) and G (capital gains) are exempt from taxation in Portugal as long as they are taxed in other countries, territories or regions.

 

 

Taxation on married people or on de facto unions with different tax statuses

Taxpayers who are married (not judicially separated from persons and property) and those in de facto unions (in Portugal, legally recognized, though with different legal rights and obligations from married couples) can only opt for joint taxation if the coincide periods of residence or partial non-residence.

 

 

Registration after 31st March 2025

If eligible - and the NHR registration has been done out of time, after 31st March 2025 -, you can still benefit from the tax benefit from the year in which the registration is complete, but only for the remaining period until the end of the 10-year period.

 

 

How to apply for non-habitual resident status

In addition, meeting the requirements to apply for non-habitual resident also demands you:

 

• To register as a resident in Portugal at a Finance Service or Citizen Shop;
• To register as a non-habitual resident - after obtaining a Tax Identification Number (NIF). You can do this online on the Finance Portal or in person at a Finance Service or Citizen Shop;
• To provide proof of performing a "high value-added activity" if requested by the Tax and Customs Authority.

 

Tax Incentive for Scientific Research and Innovation

The Scientific Research and Innovation Tax Incentive programme replaces the Non-Habitual Resident Status and is provided for in the Tax Benefits Statute (EBF)..
This programme is also intended for future residents in Portuguese territory who have not lived here in any of the previous five years. However, to be eligible, interested parties must obtain their income derived from some of the activities listed in the Tax Benefits Statute. Namely, teaching in higher education and employment in the scientific area in entities dedicated to the production, dissemination and transmission of knowledge, among others.
In these cases, the IRS benefit  - special tax rate of 20% on net income -  from categories A and B will be maintained for the next 10 following years (from the registration year as a resident in portuguese territory).

 

How can I register for this tax Incentive?

Registration is possible in and by the portuguese official entities that represent those activities, namely:

• Foundation for Science and Technology, I.P. (FCT): activities listed in paragraph a) of Article 58-A of the EBF;
• Agency for Investment and Foreign Trade of Portugal (AICEP), E.P.E;
• Tax and Customs Authority (AT);  
• Agency for Competitiveness and Innovation, I.P. (IAPMEI), or Agency for Investment and Foreign Trade of Portugal (AICEP);  
• National Innovation Agency, S.A. of Startup Portugal and the Autonomous Regions of the Azores and Madeira