Non Habitual Residency (NHR) programme 10 year tax holiday in Portugal
The NHR programme was introduced in Portugal in 2009 and is now one of the most successful tax residency programmes worldwide. The benefits available under the programme are not exclusive to EU nationals and therefore the programme will continue to be available to British nationals. Irrespective to Brexit. Applicants only need to become tax resident in Portugal and have been non – tax resident for the previous 5 years. The programme has been supported by successive Portuguese governments and is complemented by the lifestyle that the country offers, often being referred to as the Florida of Europe. The key components to success of the programme include the following:
- No minimum investment required
- Pension income, drawn down as a lump sum or as a periodic payment, tax free in Portugal irrespective of source
- Salary from a high value activity subject to a flat rate of tax of 20%
- Split tax year treatment in first year of Portuguese tax residency
- Approval received within 5 to 7 days
- Dividends, interest and royalties tax free if applicable, provided that source is white list
- Status available for a period of 10 years
- Habitual residency/183 day test in subsequent years
Expats reprieved on Portugal pension tax:
In a recent article in International Adviser 30th October 2017:
“Tom Carnegie confirms that a widely speculated 10% tax on expat pensions transferred to Portugal has been left out of the country’s 2018 budget, but this does not mean the rule change is not coming. The Portuguese government confirmed in September that it was looking at making changes to its highly generous non habitual (NHR) tax regime which has been in operation since 2009 and experts expect the introduction of a flat rate tax of either 5% or 10% on pension income for new NHR’s. It is expected that previously registered NHR’s would not be affected by the tax. Geoffrey Graham, Senior partner at law firm Edge International Lawyers suggested that the Portuguese government is currently under pressure from other European countries to impose taxation on expat retirees. As a result, Portugal’s finance minister Mario Centeno, pledged to introduce a standardised taxation of foreign pensions to maintain “a good Fiscal relationship” with other European countries: Hence the anticipated 10% tax commencing from 2019.”
Thinking of making a move to Portugal or just want to know more about your place in all of this?
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