Unusual residents

Portugal took measures in 2012 to simplify the tax regime of so-called Non-Habitual Residents to attract non-resident citizens to our country. The scheme is already fully operational and offers relevant tax benefits for those who wish to establish their residence in Portugal, including citizens of other Member States of the European Union.

Non-Habitual Resident scheme applies to taxable persons who have not been tax ed in Portugal in the last five years and remain in Portugal more than 183 days a year, followed or interpolated or have housing in Portugal on 31 December of that year conditions that suggest the intention to maintain and occupy it as habitual residence.

Among the tax benefits stand out:

• The exemption from taxation in Portugal, from income from a foreign source, resulting from dependent work or pensions.
• Taxation at the rate of 20% of portuguese source income arising from value added activity*.

Tax benefits are granted to Non-Habitual Residents for a period of 10 years.

Having tax residency in Portugal also offers additional tax advantages, since there is no inheritance tax in Portugal for direct family members.

* Architects and engineers, artists, actors and musicians, auditors and tax consultants, doctors and dentists, university professors, investors, administrators and managers, senior management, as specified in Ordinance 12/2010, of January 7.