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Final decision: Changes to the NHR tax regime in Portugal will come into effect from 2024.
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On November 29, 2023, the Portuguese Parliament approved the termination of the Non-Habitual Residency (NHR) tax regime – this is a final decision, and the budget for 2024 has already been approved.
Key Aspects of the Preferential Tax Regime NHR
Under the NHR regime, foreign citizens pay a fixed rate of 20% on their income for a period of 10 years. For comparison, for local residents, income tax rates range from 15 to 48%.
NHR tax benefits will still apply to the following individuals:
➡️ Individuals who have previously obtained NHR status.
Those who are already benefiting from this will not be affected and will be able to maintain the 20% rate on their income until the end of the 10-year period.
➡️ Individuals who establish tax residency in Portugal by December 31, 2023.
Foreign citizens who become tax residents of Portugal by December 31, 2023, and engage in activities with high added value, scientific, artistic, or technical nature, can apply for NHR tax status. They retain the right to register to obtain NHR status until March 31, 2024.
➡️ Individuals who are eligible to become tax residents by December 31, 2024, subject to certain conditions described below.
Those wishing to take advantage of this special tax regime can do so until December 31, 2024, if one of the following conditions is met:
A lease agreement or assignment agreement to Portugal concluded by December 31, 2023;
A lease agreement or another contract granting the right to use or own property in Portugal concluded by October 10, 2023;
A reservation contract or a contract for the acquisition of rights to real estate concluded by October 10, 2023;
Enrollment or registration of children in an educational institution located in Portugal completed by October 10, 2023;
Residence permit valid until December 31, 2023;
Visa or residence permit application initiated by December 31, 2023.
New Perspectives in Portugal’s Tax Policy
Although this special tax regime is ending, the state budget introduced new tax benefits for professors at higher education institutions or those engaged in scientific research, as well as for those working in startup companies.
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Elena Georghiou – Founder and Managing Director of Feod Group. Has two higher educations: the first at the Odessa State Polytechnic University, majoring in automation and computer engineering (1986) and second in the Moscow State Law Academy, majoring in law (1991). Has work experience in London i...
Elena Georghiou – Founder and Managing Director of Feod Group. Has two higher educations: the first at the Odessa State Polytechnic University, majoring in automation and computer engineering (1986) and second in the Moscow State Law Academy, majoring in law (1991). Has work experience in London immigration law firms. Is a regular participant in seminars and trainings on immigration, corporate and private law of the European Union. Elena Georghiou has more than 25 years of legal experience and heads the specialized Residency and Citizenship practice across European countries, UK and USA advising HNWIs and their families on:
immigration planning;
consultations on obtaining alternative (second) citizenship;
Residency and Citizenship by Investment;
business immigration;
preparation of appeals, working with complex immigration cases.
She advises individuals and corporate clients for wealth/business structuring and assets protection. Central to her Managerial role in the company she initiated and united high level lawyers and other top professionals around the word in order to provide Feod Group clients with bespoke level of legal and business services word wide, keeping the staff focused on the opportunities and challenges faced by each individual client. Speaks Russian, Ukrainian, English.
