The State Budget unveiled today anticipates the termination of the special tax regime for Non-Habitual Residents starting from January 1, 2024.
The 2024 State Budget, presented to Parliament by the government, affirms that the Portuguese government will no longer accept new registrations under the NHR tax regime for individuals who become tax residents in Portugal in 2024.
The tax benefits of the NHR Tax Regime will continue to apply to the following individuals:
- Taxable persons who have acquired the status of NHR within the allotted time frame.
- Individuals who establish tax residency in Portugal by December 31, 2023.
- Individuals holding a valid residence visa until December 31, 2023.
Key Advantages of the NHR Tax Regime:
Work Income
- A special flat tax rate of 20% on labour and self-employment income derived from high-value-added activities within Portugal.
- Exemption from taxation on labour income earned outside Portugal provided it is taxed in the source country.
- No taxation on self-employment income from high-value activities conducted outside Portugal, subject to applicable tax treaties.
Passive Income
- Tax-free treatment of dividends, royalties, and interests earned outside Portugal, irrespective of taxation in the source country.
- No taxation on capital gains from foreign property transactions.
Pensions
- A flat 10% tax rate is applied to foreign pensions and Private Pension Funds, with an optional tax credit mechanism available to prevent double taxation.
Tax Department
Sofia Quental | Flávia Almeida | Catarina Amaral
