Would you like to live in Portugal and pay less tax? There are a lot of ways to obtain a residence permit in the country: you can take part in the Golden Visa program which allows a number of investment options. There are also D2 and D7 visas, and you can follow the link below to see if you qualify for them. However, the best way to reduce the tax burden in Portugal is to acquire the NHR (Non-Habitual Resident) status. Portugal is a country where the taxes are quite high, but the NHR program can help you pay much less – well, at least for 10 years. If you want to know more, please visit a trusted portal to read practical information on the legal resident status in Portugal.
The NHR regime was introduced in Portugal in 2009. If you acquire this status, your worldwide income will not be taxable for ten years.
You will have to become a local fiscal resident before you can apply for the NHR status. It means that you must have a legal residence permit and reside in Portugal for most of the year.
Becoming a Non-Habitual Resident is quite a complicated task at times, with the majority of difficulties arising at the state of opening a bank account with a local bank, residence permit acquisition, buying local real estate, or concluding a long-term rental contract.
If you feel that you would be more comfortable with professional assistance, do not hesitate to follow the above link and talk to a specialist using a live chat during office hours.
Who Can Become a Non-Habitual Resident?
Here are the requirements you will have to meet to become a non-habitual resident in Portugal:
- You have to submit an application requesting the NHR status to the local customs and fiscal authorities.
- You are required to have a rented or own place of residence in Portugal.
- You must live in Portugal for most of the year (183 days) and pay no taxes for five years before you file an application for NHR.
Tax Reductions for NHRs in Portugal
The status of a Non-Habitual Resident entitles you to the following tax benefits:
- The income you receive in Portugal is taxed at 20% (while the maximum personal income tax rate in Portugal reaches 48%).
- The holder of the NHR status is not required to pay taxes on the income derived from other countries unless those are on the blacklists.
- The tax payable on foreign pensions equals 10%.
- You will pay zero tax on dividends from foreign sources, interests, rent income, or royalties.
Obtaining a NHR Status in Portugal
If you want to become a Non-Habitual Resident of Portugal, the first step is to become the country’s fiscal resident. You can try and do it on the condition that you have not paid any taxes to the Portuguese treasury in the past 5 years (otherwise, you will not be eligible for the NHR status).
Here is what you have to do to become a fiscal resident:
- Receive a NIF (the local taxpayer identification number)
- Live in Portugal for at least 183 days a year
- Have a place of residence in Portugal (you can submit a long-term rental agreement)
If you want to obtain a legal residence permit in the country, you will have to comply with the same requirements.
Becoming a Legal Resident of Portugal
Here are the currently available paths for becoming a legal resident of Portugal:
- Conclude a job contract with an employer in Portugal.
- Register a sole proprietorship or a company in Portugal. You can also use Madeira as a place of incorporation, which is the country’s low-tax area. This step will entitle the company owner to obtain residence permits for himself and his family members. If you are a self-employed person, a freelancer, or a medium- or large-scale business owner, and you want to live in Europe, you can get a D2 Visa.
- If you work remotely, you can obtain a digital nomad visa (a short-term residence permit lasting up to one year).
- If you are a highly qualified specialist, a top manager, a scholar, a scientist, or an outstanding artist, you can easily acquire a residence permit in Portugal.
- If you are a financially independent person, you can obtain a D7 Visa valid for two years that can be extended when the period expires.
- If you attend a school or a university in Portugal, you can obtain a student visa.
- The spouses and children of those who live in Portugal on D2 Visas can get a residence permit for family reunification.
Documents Submitted to Receive the NHR Status in Portugal
Here is a list of documents you will have to collect to become a Non-Habitual Resident in Portugal:
- Tax declaration from the other countries for the past five years
- Proof of the fact that you have not paid taxes to Portuguese authorities in the past five years
- Email address and phone number
- Proof of a place of residence in Portugal (a long-term rental agreement for at least one year or a property ownership certificate)
- Tax identification number (NIF)
NHR status is not available to any foreigner who lives in Portugal. If you opened a company in the country and made a profit, for instance, it means that you have paid some taxes locally. As a result, the NHR status is impossible to obtain in the next 5 years.
Conclusion
Would you like to live in Portugal and use the legal opportunity to reduce your tax burden? The NHR is an excellent scheme – especially if you are planning to stay in the country for permanent residence along with your family. If you have lived in Portugal for 5 years, you have the right to apply for a local passport. It will give you ample opportunities – and you can live, work, study, or engage in business activities in any EU country after that.
Sounds interesting? Do not hesitate to follow the above link to explore more about Portugal or talk to an expert and find the best way out in your situation.