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The New NHR in Portugal

Incentive to scientific research and innovation

Home | Expat Services | The New NHR in Portugal – Incentive to Scientific Research and Innovation

What is the New NHR in Portugal, also known as “NHR 2.0”?

The new special Portuguese taxation regime applies to expats living in Portuguese territory who comply with specific requirements. This program is specially designed for certain people wishing to transfer their residence to Portugal.

Those qualifying for the Non-Habitual Resident (NHR) regime qualify as residents for tax purposes in Portugal and are taxed at a reduced rate.

The NHR 2.0 status is valid for ten consecutive years and is non-renewable.

Why?

The New NHR in Portugal, also known as “NHR 2.0”

Learn more about all the benefits, requirements, obligations and more of the the new NHR Regime.

NHR 2.0 Status Requirements
  • Have not been resident in Portugal in any of the prior five years
  • Carry out one of the following activities/jobs:
    • Job positions or other activities carried out by tax residents in the Autonomous Region of Madeira (or the Autonomous Region of the Azores), under terms to be defined by regional Decree.
    • Teaching in higher education and scientific research, including scientific employment in entities, structures and networks within the national science and technology system, as well as jobs and members of governing bodies in entities recognized as technology and innovation centres; or
    • Job positions and members of the governing bodies of entities certified as start-ups under the Portuguese Start-Up Law or
    • Qualified jobs and members of the governing bodies of entities that fall within the scope of contractual benefits towards productive investment under Chapter II of the Portuguese Investment Tax Code; or
    • Highly qualified professions, to be defined in a Ministerial Decree, developed in:
      • Companies with relevant applications in the year of start of work or prior five years that benefit or have benefited from the Tax regime for investment promotion (RFAI); or
      • Industrial and service companies (with activities in areas to be defined by Ministerial Decree) that export at least 50% of their turnover in the year of start of work or prior two years.
    • Other qualified job positions and members of the governing bodies of entities that carry out economic activities recognized by AICEP or by IAPMEI (investment public agencies) as deemed relevant to the national economy, notably in the context of attracting productive investment as well as reducing regional asymmetries; or
    • Research and development personnel whose costs are eligible for the R&D tax incentive system as set out in the Investment Tax Code.
NHR 2.0 Jobs and Activities carried out in the Autonomous Region of Madeira
The list of jobs and activities carried out in the Autonomous Region of Madeira is to be legislated by the Legislative Assembly of the Autonomous Region of Madeira. It will be updated in this section as soon as possible.
NHR 2.0 Tax Benefits
The taxpayer who meets the requirements as a new tax resident from 2024 onwards and falls within one of the positions listed above may be taxed at a special rate of 20% on employment or entrepreneurial income earned within the scope of the said activities for ten consecutive years.

The right to be taxed under the terms of this regime requires that the taxpayer continues to earn active income with a maximum interim period of 6 months between eligible activities/jobs.

NHR 2.0 Tax Exemption

Eligible taxpayers will also be exempt from foreign income from several income categories: employment income performed abroad, self-employment income performed abroad, foreign rental income and capital gains on foreign-based assets. This exemption does not include pension income.

Capital income derived from sources in blacklisted jurisdictions will be subject to a flat 35% rate.

Ministerial Decree will regulate the registration of beneficiaries with entities and communication with the tax authorities. Until the approval of such Ministerial Decree, the activities qualifying as “high added value activities” currently apply to the old NHR regime. Beneficiaries are registered directly with the tax authorities, as in the NHR regime.

This special regime can only be used once and is not available for taxpayers who benefit from the NHR regime or opt for partial exemption under a special regime for former residents.

Special Regime for Former Residents
A 50% relief capped at EUR 250,000 of employment and business income applies to former Portuguese tax residents who become residents in the years 2024 to 2026. The regime is available only for former tax residents who were not tax residents in Portugal in the five years prior to their application. The relief applies for five years and may not be cumulated with any other special regime.
Need More Information?

If you are planning to move to Madeira or Portugal and need help applying for the NHR program, do not hesitate to contact our team. Learn more about it in our brochure.

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