The Non-Habitual Residents (RNH) regime allows individuals to benefit from a special Personal Income Tax (IRS) regime for a period of ten consecutive years, provided they haven’t been tax-resident in Portugal in any of the five years preceding the year in which they register as tax-residents in the country.
Income from a foreign source (ie., obtained outside Portugal):
Income from a foreign source (ie., obtained outside Portugal):
- The RNH regime allows certain categories of foreign-sourced income to be exempt from taxation in Portugal, provided that they are not considered to have been obtained in jurisdictions with clearly more favourable tax regimes;;
- As a general rule, "passive income” from a non-Portuguese source (i.e. dividends, interest, royalties, income from real estate) may be exempt from IRS in Portugal. However, for this to apply, it is necessary that the State from which such income originates is granted taxing rights under a double taxation treaty concluded between Portugal and that State (or, in the absence of such treaty, under the rules set out in the OECD Model Convention). Additionally, capital gains arising from the disposal of assets (e.g. shareholdings) are, as a rule, subject to taxation in Portugal at a rate of 28%;
- Regarding income from employment or independent services, the rules differ slightly:
- Foreign-sourced employment income may be exempt from IRS in Portugal if taxed in the State of source, in accordance with the provisions of a double taxation treaty concluded between Portugal and that State. Otherwise, it is taxed in Portugal at the standard IRS progressive rates or – if resulting from a high value-added activity – at a flat rate of 20%;
- Independent services income from a foreign source deriving from a high value-added activity may be exempt if, under the applicable tax treaty, the State of source is granted taxing rights over that income. Otherwise, it is taxed in Portugal at the standard progressive IRS rates or, where applicable, at a 20% flat rate.
- Since the State Budget Law for 2020 came into force, pensions from non-Portuguese sources are subject to taxation in Portugal at a rate of 10%;
- Exempt income is aggregated for the purpose of determining the rate to be applied to the remaining income.
Portuguese source income:
- The net income earned in Portugal by an individual who qualifies as a Non-Habitual Resident, either from employment or from independent services, is taxed at a special rate of 20%, provided that it is earned in the context of high value-added activities of a scientific, artistic, or technical nature. Otherwise, the income is subject to the general IRS progressive rates;
- Capital income (e.g. interest and dividends), capital gains on securities, and real estate rental income obtained in Portugal may be subject to a 28% rate (under the same conditions applicable to other tax residents).
Requirements
To become a Non-Habitual Resident, an individual must have become tax resident in Portugal under the general rules. This requires remaining in Portugal for more than 183 days, consecutive or not, during a period of 12 months beginning or ending in the relevant year. Alternatively, where this threshold is not met, the individual must maintain a dwelling in Portugal in conditions that indicate an intention to hold and occupy it as a habitual residence.
Additionally, in order to qualify for the RNH regime, the individual must not have been considered tax resident in Portugal during the previous five years. Applications for this regime are no longer open to new applicants as of 2024. The above requirements remain relevant only for individuals who registered within the applicable deadlines.
To benefit from the regime throughout the entire 10-year period, the taxpayer must be regarded as resident in Portuguese territory in each of those years.
How to obtain
The application for registration as a Non-Habitual Resident had to be submitted by 31 March of the year following that in which the individual became resident in Portuguese territory, through the Portal das Finanças.
This procedure is no longer available to new applicants and remains applicable only to individuals who have already obtained RNH status.
This procedure is no longer available to new applicants and remains applicable only to individuals who have already obtained RNH status.
