In 2023, the Non-Habitual Resident (NHR) status was revoked and replaced by the Scientific Research and Innovation Tax Incentive.
What exactly was the NHR?
The NHR was a special tax regime that offered benefits to foreigners or Portuguese citizens who had not been tax residents in Portugal for the previous five years.
Who is considered a tax resident in Portugal?
To be considered a tax resident in Portugal, one must either have stayed in the country for 183 days or have Portugal as their primary residence, proving a residential connection.
Why did the NHR cease to exist?
The Portuguese government concluded that the NHR was contributing to rising housing prices and making it increasingly difficult, especially for young people, to access affordable housing. This change was included in the 2024 State Budget, with details clarified by the Tax Authority.
Is the NHR completely gone?
The original NHR was revoked by Law 82/2023, but a new version, commonly referred to as NHR 2.0, has been introduced with updated benefits.
We will delve deeper into the NHR 2.0 topic shortly in our Category – News.
Transition Rules for Current NHR Holders:
– Current NHR Holders: Continue to enjoy the benefits until the end of the 10-year period.
– Applications until December 31, 2023: You may apply until March 2024 if you were registered as a tax resident in 2023;
For New Residents in 2024:
– Apply for NHR by March 2025;
– Prove residency conditions in 2024;
– Submit evidence of intent to become a tax resident in Portugal.
Required Documents:
– Employment Contract: Signed by December 31, 2023.
– Rental Agreement: Signed by October 10, 2023.
– Property Purchase Agreement: Signed by October 10, 2023.
– Children’s School Enrollment: Completed by October 10, 2023.
– Visa/Residence Permit: Valid until December 31, 2023.
– Visa Process Initiation: Started by December 31, 2023.
If this applies to you, and you wish to become a tax resident in 2024 while meeting these conditions, you may still qualify for the NHR, with the regime beginning the year you register.
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