Portugal’s Non-Habitual Resident (NHR) program has transformed how people seek tax efficiency with crypto assets. As the NHR undergoes changes, it’s key to grasp how crypto taxation works for those thinking about moving to Portugal.
What is the NHR Portugal Program?
Portugal brought in the Non-Habitual Resident (NHR) program back in 2009. Its goal? To draw skilled workers, retirees, and wealthy folks to the country. This system gives new residents big tax perks. These include not paying taxes on money from outside Portugal and lower rates on certain types of income made in Portugal. If you qualify for NHR status, you can enjoy these tax benefits for up to ten years. That’s a good chunk of time to make the most of these advantages.
Nevertheless, as 2024 rolls around, Portugal’s government is phasing out the NHR program, though it’s still open to new applicants during the transition period until the close of 2024. To be eligible for NHR, people need to set up their tax home in Portugal and tick certain boxes, like not having been a tax resident in the country for the last five years.
The Transitional Regime: What’s New in 2024?
Portugal’s 2024 State Budget lays out a plan to end the NHR program. People can still apply in 2024 if they meet certain conditions by set dates. For example, they need to have a job offer, a real estate agreement, or a valid residence visa by the end of 2023. This transition gives applicants a chance to lock in NHR benefits before the program goes away for good. It’s the last shot for those looking to take advantage of a tax-friendly setup.
The NHR’s reduced tax rates and exemptions are still available to applicants in 2024 even as the transition period signals the end of an era. But they need to move fast since new applications won’t be accepted for much longer. Also, people must meet specific eligibility requirements before the cutoff dates.
Crypto Taxation Under the NHR
The NHR regime’s favorable tax treatment of cryptocurrency gains is one of its key perks for crypto investors. The current NHR regime doesn’t tax crypto assets held for more than 365 days. This means people who hold for the long term can enjoy gains without paying taxes, which gives a big incentive to those involved in the expanding crypto market.
Nevertheless, if you hold assets for under a year, you’ll pay a flat tax of 28%. The government doesn’t tax capital gains until you change them into regular money or other assets. Moving crypto between wallets doesn’t count as taxable, which gives crypto traders and investors more options.
These tax rules make Portugal one of Europe’s top spots for people into cryptocurrency. The NHR’s perks for crypto taxes and its overall tax benefits have turned Portugal into a hotspot for wealthy individuals in the crypto world.
Portugal’s Crypto Taxation Scene Without NHR
As the NHR system is being discontinued, people are wondering how crypto will be taxed for non-NHR residents. Regular residents face the same crypto tax rules as those with NHR status.
Also, any money made from crypto work might still count as freelance income. This gets taxed at Portugal’s stepped rates, which can go up to 48%. To figure out the right way to handle taxes, it’s a good idea to ask an expert.
NHR and Double Taxation Agreements
The NHR system in Portugal also has another key feature: its Double Taxation Agreements (DTAs). These deals stop people from paying taxes twice on the same money in different countries. This matters a lot to crypto investors who make money from many places. The DTA makes sure that if you pay tax on money in one country, you won’t have to pay again in Portugal. This gives international investors one less thing to worry about.
Portugal has deals with more than 80 countries. So most crypto investors who make money from other places can use these deals. By using DTAs crypto investors might be able to pay even less in taxes.
The Future of Crypto in Portugal: Chances Beyond NHR
Even though the NHR program is ending, Portugal still draws in crypto investors and fans. The country has taken a forward-looking stance on crypto rules giving clear guidelines and good conditions for people who hold crypto long-term. As the crypto world keeps changing, Portugal’s tax laws might also shift creating new chances for people to settle there.
Those looking to invest should keep an eye on rule changes, as the government might bring in new systems or tweak current tax policies to keep Portugal competitive in attracting crypto wealth.
Conclusion: Is Portugal Still a Crypto Haven?
Even though Portugal is phasing out its NHR program, it’s still a hot spot for people investing in cryptocurrencies. The country’s forward-thinking tax rules, which don’t tax long-term crypto holders and don’t have wealth taxes, keep pulling in crypto investors. This transition period gives folks one last chance to secure these perks under the NHR. So, if you’re thinking about it, you might want to move to apply.
Portugal’s prime spot in the EU, tax-friendly rules, and sunny way of life make it a top pick for people who want to boost their crypto profits while living well. Even without the NHR, the country’s crypto tax laws are still better than many other EU countries, which keeps Portugal attractive to digital nomads, retirees, and wealthy individuals.
FAQs
- What is the NHR regime in Portugal? The Non-Habitual Resident (NHR) regime gives new Portuguese residents a special tax status. It has an influence on foreign-sourced income by offering lower rates and exemptions.
- How does Portugal tax crypto gains under NHR? Under NHR, Portugal doesn’t tax crypto assets kept for more than 365 days. For assets held less than a year, the tax rate stands at 28%.
- When does the NHR regime end? The regime will stop taking new applications after 2024. However, people already benefiting from it can keep enjoying its advantages for 10 years.
- What are the tax rates for crypto in Portugal without NHR? Portugal doesn’t tax crypto profits if you hold them for more than a year. If you sell within a year, you pay a flat 28% tax on your gains.
- Can I still apply for NHR in 2024? Yes, you can. But you need to meet certain conditions. These include setting up your tax home in Portugal and meeting specific deadlines.
The information in this article on “nhr portugal crypto” is for general informational purposes only and is not intended to constitute legal advice. While every effort has been made to ensure the accuracy of the content, laws and legal procedures can change, and the specifics of each case can vary widely. Therefore, readers are advised to consult a qualified professional or attorney in Portugal for advice tailored to their circumstances before taking action. This article does not create an attorney-client relationship between the reader, the authors, or the publishers. The authors and publishers are not liable for any actions taken or not taken based on the content of this article.
Laurinda holds a Diploma in Business Administration from the South African Institute of Administration and Commerce… Read more
