Tax-free living in Portugal

Tax-free living in Portugal

Portugal

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You’re sold on Portugal’s golden, sandy beaches as far as the eye can see, magic mountains, vibrant and cosmopolitan cities and a millennial heritage. You know that winters are mild with temperatures last week hitting 21’C and summers hot and dry with the number of hours of sunshine per year getting as high as 3,300 in the south of the country and 1,600 in the north - some of the highest in Europe.

Portugal is also one of the best countries for buying a house, due to its clear and transparent tax rules and facilities for obtaining residence permits, as part of new legal provisions that are more attractive to foreign investors.

But did you know that Portugal also has a special regime for non-habitual residents, aimed at attracting foreign investors through very favourable income tax rates?

The Portuguese Non-Habitual Residency status enables those who become tax resident in Portugal and are accepted as a non-habitual resident, the opportunity to receive qualifying income tax-free both in Portugal and in the country of the source of the income.

The NHR regime represents a major step forward in making Portugal a tax free jurisdiction for individuals in receipt of qualifying non-resident income. Qualifying income includes pension, dividends, royalty and interest income.

This attractive regime also covers professional income from high value-added activities, which benefit from a special flat tax rate of 20%.

The sole requirement to benefit from this preferential treatment is to become a Portuguese tax resident, not having been a tax resident in Portugal in the previous five years. This status is granted for 10 years.

We can also recommend local multilingual tax specialist lawyers with very high success rates for NHR applications.

Published in: Guide to Portugal / News and Updates / Portugal Property / Property / Property for sale in Portugal / Site News / Taxation