RPBA - The Portuguese Non-Habitual Tax Resident Regime - A detailed guide on the NHR tax rules - Updated: 11.11.2022

THE PORTUGUESE NON-HABITUAL
TAX RESIDENT (NHR) REGIME
A detailed guide on the NHR tax rules

Contents PAGES: PAGES:
Introduction 3
Procedure to Request the European Card for Social
Security Health Insurance
39
Basic Features of the IRS Regime 4 Taxation of financial income: summary 41
Basic Features of the NHR Regime 6
Taxation of non-habitual resident participants’ income
in non-Portuguese investment funds
42
Can the RNH Regime be changed again? 7 Taxation of financial income: the issue of capital gains 44
Key Advantages 9 Taxation of financial income: some pitfalls 47
New list of High Value-Added Activities of a
Scientific, Artistic or Technical Nature
16 Taxation of financial income: conclusions 50
Old list of High Value-Added Activities of a
Scientific, Artistic or Technical Nature
20 Pension income Vs Labour Income Vs Financial income 53
Social Security 25 Pension income and the possibility of renegotiation 55
Other Attractive Features of the Portuguese IRS
Taxation of Individuals
27 Taxation of crypto-currencies: developments 57
2015 Proposals by the IRS Reform Commission 30 Taxation of trusts: recent developments 58
Procedure to Register as Tax Resident in Portugal 32 Direct or indirect purchasing of real estate? 61
Proof of Portuguese Tax Residence 33 Inheritance and gift 69
Standard legal and tax step plan on becoming a
Portuguese non-habitual tax resident
35
Inheritance and gift:
Stamp Tax as it applies today
71
Procedure to Register in the Portuguese National
Health System
36 Other inheritance and gift aspects 74
Driving License 37 Compliance / Submission of yearly tax returns 77
Car Importation 38 The Portuguese NHR Regime 79
Find more about the country in the “Why Portugal” sections of this document
(from page 5 onwards)

Introduction
The Portuguese tax regime for non-habitual residents is
motivating high net worth individuals, pensioners and
high value added professionals to relocate to Portugal,
either on a permanent or on a temporary and expatriate
basis. The regime is granted to individuals who become
resident for tax purposes in Portugal without having been
so in the five preceding years. Non-habitual resident
individuals may enjoy such status for a ten-year period,
after which they will be taxed under the standard regime.
The latest updates to this document are highlighted
in yellow.

Basic Features of the IRS Regime
▪ Worldwide basis system for Personal Income Tax
(“Imposto sobre o Rendimento das Pessoas
Singulares”, hereinafter “IRS”) and credit method to
avoid international double taxation;
▪ Progressive IRS rates (higher bracket of 48% for
taxable income above € 75.009; additional solidarity
rate of 2,5% on taxable income above € 80.000 and
of 5% above € 250.000);
▪ 28% autonomous tax rate on rental income, capital
income and non-short-term capital gains on
shareholdings, securities, derivatives, autonomous
warrants and certificates;
4
▪ Portuguese tax residence for IRS purposes may be
acquired, namely:
a) Staying for more than 183 days in the Portuguese
territory, whether these days are consecutive or
not, in any 12-month period beginning or ending
in the given tax year;
b) If staying for a shorter period, having in the
Portuguese territory, on any day during the period
referred above, a dwelling under circumstances
that lead to the presumption of an intention to
hold and occupy it as a habitual residence.

5
29th country on the OECD Better Life Index
2020 (1), 1st on InterNations Expat Insider
2022: Quality of Life Index. (2)
According to the 2021 Annual Global
Retirement Index from International Living
Portugal was considered the best country in
Europe to retire to and the 5th best in the
World (3) and as reported by CNBC, Portugal is
the best place to retire abroad. (4)
Portugal (https://en.wikipedia.org/wiki/Portugal) has a number of attractive characteristics:
#01
Quality of Life
Why Portugal?
(1) - https://www.oecdbetterlifeindex.org/countries/portugal/
(2) - https://cms-internationsgmbh.netdna-ssl.com/cdn/file/cms-media/public/2022-07/Expat-Insider-2022-Survey.pdf
(3) - https://internationalliving.com/the-best-places-to-retire/
(4) - https://www.cnbc.com/2020/01/03/the-10-best-places-to-retire-abroad.html

Basic Features of the NHR Regime
▪ Decree-Law nr. 249/2009, of 23 September,
created a new IRS regime for NHR individuals;
▪ This status is granted to individuals who become
residents for tax purposes in Portugal without
having been so in the previous five years;
▪ NHR individuals may enjoy such status for a ten-
year period, after which they will be taxed under
the standard IRS regime;
6
▪ This new tax regime targets non-resident
individuals who are likely to establish a
permanent or temporary residence in Portugal;
▪ It establishes, under certain conditions, an IRS
exemption on foreign source income, as well as
a limited 20% taxation of income from
employment and independent personal
services, in both cases if deriving from listed
high value-added activities;
▪ NHR are issued Portuguese certificates of tax
residence. The rationale of the regime is that we
are only switching over the credit method for
the elimination of international double taxation
for the exemption method;

Can the RNH Regime be changed again?
▪ The particular features of the NHR regime may always be
amended by law, for better or worse, even for those who
have been granted NHR status prior to the enactment of
any change;
▪ New changes to the NHR regime, subsequent to those
introduced in 2020 on pensions, could happen, but it is
not likely, as the regime was introduced in 2009 by a
government of the same center-left wing party (“Partido
Socialista”) as the present government, which has
parliamentary majority until October 2026;
▪ The Budget Law for 2020 represents an important
precedent that shows the political willingness to safeguard
the legitimate expectations of taxpayers. Indeed, those
that entered the regime prior to the Budget Law for 2020
changes will keep the previous regime until the end of
their 10-year tax benefit period.
7
▪ Additionally, there is currently no significant public debate
or controversy surrounding the NHR regime and no
changes to it have been included in the Government
Program approved by parliament (which may be found here
– only available in Portuguese).
▪ In any case, if such change happens (i) even if NHR status is
abolished, it cannot be taken away from those that already
have it at the time the change is approved; (ii) although the
NHR status cannot be taken away, the regime could be
made less attractive (reducing the scope of the exemptions,
for instance) even for those that have obtained it in the
past. To what extent such change could be made is very
debatable under Portuguese administrative and
constitutional law. Some changes would always be
admissible, but in principle a change that would make the
NHR regime purely nominal (making NHR and normal
residents taxed in the same way or with only very minor
differences) should not be allowed. Assessing the degree of
change that is allowed is very difficult.

8
Weather and environment quality
(12th country on the OECD 2020
Better Life Index).
Why Portugal?
Estimated 3300 hours of sunshine
per year, one of the highest rates
in Europe.
#02
Weather
#03
Sunshine

Key Advantages
▪ Foreign-sourced passive income (interest, dividends, certain royalties, capital gains on
securities and other income from capital, capital gains and income from immovable
property) derived by NHR is IRS exempt in Portugal (without progression except in the case
of capital gains on real estate) provided that it is potentially liable to taxation (no effective
taxation required) in the source State (i) under the rules of an existing Double Tax Treaty
(DTT) or (ii) in the absence thereof, under the rules of the OECD Model Tax Convention if
such income is not deemed to arise from a State, region or territory included in the
Portuguese tax havens’ blacklist nor from a Portuguese source under the IRS Code
territoriality rules.
9

Key Advantages
▪ Foreign-sourced income from pensions for current entrants into the NHR regime (and for all
those that became Portuguese tax residents after the entry into force of the Budget Law for
2020, which occurred on 1 April 2020) are subject to a flat tax rate of 10% on foreign-
sourced pensions (instead of the previous exemption), as well as on other payments, such
as pre-retirement benefits and "lump-sum" payments from pension funds and similar
retirement schemes. A Portuguese foreign tax credit will be available against the one paid
on this income in the source State. Taxpayers may opt out of the 10% standalone rate and
aggregate the income to the remaining one, so that it is taxed in accordance with the
progressive rates.
10

Key Advantages
▪ Old entrants into the NHR regime (those that became Portuguese tax residents until the
Budget Law for 2020 entered into force - which occurred, as mentioned, on 1 April 2020),
who applied for the registration as NHR until 31March 2020, or 31March 2021, respectively,
were grandfathered from the proposed changes and remain on the previous exemption
regime.
▪ However, they can choose to apply the new regime. Under the blackletter of the law, this
was a one-off option for 2020 and subsequent years. That option to swap the old regime for
the new regime should be exercised on the IRS return vis-à-vis the 2020 income, to be filed
until June 2021. However, in practice, the IRS return vis-à-vis the 2021 income again allowed
old entrants an opt-out into the new regime. Apparently, this opt-out will continue to be
granted annually, also in subsequent years.
11

Key Advantages
▪ Under the previous regime, foreign sourced income from pensions is IRS exempt (with
progression) if subject to taxation in the source State under the rules of a tax treaty or,
alternatively, if not deemed to arise from a Portuguese source under the IRS Code
territoriality rules. This exempts pensions which are not paid by entities with residence, head
office, effective management or permanent establishment, to which the payment relates to,
in Portugal.
12

13
Modern and cosmopolitan country:
Lisbon was elected one of the best places to travel in
2018 (5) and Porto is the best European city to live in
2019. (6)
Lisbon was also ranked the 10th most livable city in
the world in Monocle Quality of Life Survey 2019:
Best Cities to Live (7) and Braga has earned 1st place
on European’s best destinations in 2021. (8)
Portugal has a great list of “wonders” declared a World Heritage Site by Unesco. (9)
Fado (the Portuguese most traditional music genre) was considered by UNESCO Intangible Cultural
Heritage of Humanity, in 2011.
#05
Cultural Offering
#04
Modernity
Why Portugal?
(5) - www.europeanbestdestinations.com/european-best-destinations-2018/
(6) - https://www.europeanbestdestinations.com/best-of-europe/best-destinations-to-live-in-europe-if-you-want-to-leave-the-usa/
(7) - https://monocle.com/magazine/issues/125/quality-of-life-survey/
(8) - https://www.europeanbestdestinations.com/european-best-destinations-2021/
(9) - https://en.wikipedia.org/wiki/List_of_World_Heritage_sites_in_Portugal

▪ Foreign-sourced employment income is IRS exempt (with progression), provided that
it is taxed in the source State (i) under the rules of a DTT or in, the absence thereof, (ii)
of the OECD Model Tax Convention, as long as such income is not deemed to arise
from a Portuguese source under the IRS Code territoriality rules.
▪ Foreign-sourced employment income is IRS exempt (without progression) in Portugal,
provided that it is income derived from high value added activities of a scientific,
artistic or technical nature and it is taxed in the source State (i) under the rules of a
DTT or in, the absence thereof, (ii) of the OECD Model Tax Convention, as long as such
income is not deemed to arise from a Portuguese source under the IRS Code
territoriality rules.
14
Key Advantages

▪ Foreign-sourced income from independent personal services is IRS exempt (without
progression) in Portugal, provided that it derives from high value added activities of a
scientific, artistic or technical nature, as defined by Ministerial Order, and is potentially
liable to taxation in the source State (i) under the rules of an existing DTT or (ii) in the
absence thereof, under the rules of the OECD Model Tax Convention, if such income is
not deemed to arise from a State, region or territory included in the Portuguese tax
havens’ blacklist nor from a Portuguese source under the IRS Code territoriality rules.
▪ Income deriving from employment or independent personal services of a domestic or
foreign source but not qualifying for the mentioned exemptions will be liable to
autonomous taxation at a special 20% flat rate and not to the general and progressive
IRS rates (currently of up to 53% for yearly taxable income above € 250.000), provided
that it derives from high value added activities of a scientific, artistic or technical nature.
15
Key Advantages

16
▪ An amendment to the list of High Value-Added Activities, applicable from 1 January
2020 onwards, was published on 23 July 2019 (Ministerial Order nr. 230/2019). This was
an in-depth revision of the list of activities that has been in effect since 2010, in order to
align them with the needs of the labour market. Nevertheless, the most recent
Ministerial Order encompasses a wide range of professions and activities according to
the Portuguese Classification of Professions (PCP), which allows for more immediate
clarification of interpretive doubts regarding the scope and range of each of the
activities listed in the table.
▪ This new list entered into force on 1 January 2020, and it applies to individuals
registered under the NHR regime from 2020 onwards. For NHR registered as such with
effect up to 31 December 2019, even if their registration took place in 2020, the old list
still applies. However, these “old entrants” can also opt for the new one.
Scientific, Artistic or Technical Nature (Ministerial
Order nr. 230/2019, of 23 July)

17
PORTUGUESE ENGLISH
I - Actividades profissionais (códigos CPP):
112 — Director-geral e gestor executivo, de empresas
12 — Directores de serviços administrativos e comerciais
13 — Directores de produção e de serviços especializados
14 — Directores de hotelaria, restauração, comércio e de outros serviços
21 — Especialistas das ciências físicas, matemáticas, engenharias e
técnicas afins
221 — Médicos
2261 — Médicos dentistas e estomatologistas
231 — Professor dos ensinos universitário e superior
25 — Especialistas em tecnologias de informação e comunicação (TIC)
264 — Autores, jornalistas e linguistas
265 — Artistas criativos e das artes do espectáculo
I – Professional activities (PCP codes):
112 — General manager and executive manager
12 — Manager of administrative and commercial services (v.g.,
financial, HR, and strategy)
13 — Production and specialized services’ managers (v.g., farming,
livestock, forestry, fishery, mining industry, transports and others)
14 — Managers of hotel business, restaurants/catering, trade and
other services
21 —Experts in physics, mathematics, engineering and similar
technics (v.g., chemistry, statistics, urban planning, and others)
221 — Doctors (v.g., generalists and experts)
2261 — Dentists and stomatology
231 — University and higher education Professors
25 — IT and communication experts (v.g., software apps, web, etc.)
264 — Authors, journalists and linguists
265 — Creative artists and performing artists (v.g., musicians, cinema
producers, actors, dancers, etc.)

18
PORTUGUESE ENGLISH
31 — Técnicos e profissões das ciências e engenharia, de nível
intermédio
35 — Técnicos das tecnologias de informação e comunicação
61 — Agricultores e trabalhadores qualificados da agricultura e produção
animal, orientados para o mercado
62 — Trabalhadores qualificados da floresta, pesca e caça, orientados
para o mercado
7 — Trabalhadores qualificados da indústria, construção e artífices,
incluindo nomeadamente trabalhadores qualificados da metalurgia, da
metalomecânica, da transformação de alimentos, da madeira, do
vestuário, do artesanato, da impressão, do fabrico de instrumentos de
precisão, joalheiros, artesãos, trabalhadores em electricidade e em
electrónica.
8 — Operadores de instalações e máquinas e trabalhadores da
montagem, nomeadamente operadores de instalações fixas e máquinas.
Os trabalhadores enquadrados nas actividades profissionais acima
referidas devem ser possuidores, no mínimo, do nível 4 de qualificação
do Quadro Europeu de Qualificações ou do nível 35 da Classificação
Internacional Tipo da Educação ou serem detentores de cinco anos de
experiência profissional devidamente comprovada.
31 — Technicians as well as science and engineering professions of
intermediate level (v.g., mining industry, life science and others)
35 — Technicians of information and communication technologies
(v.g., telecommunications and radio)
61 — Farmers and market-oriented skilled agriculture and livestock
production workers
62 — Market-oriented skilled forestry, fishery and hunting workers
7 — Skilled industry, construction and crafts workers, including
skilled workers of metalwork, food processing, woodwork, clothing,
handicraft, printing, manufacture of precision instruments, jewelers,
artisans, electricians and electronics professionals
8 — Facility and machinery operators and assembly workers, namely
operators of fixed installations and machinery
Workers included in the above-mentioned professional activities
shall possess at least, a level 4 of the European Qualifications
Framework or Level 35 of International Standard Classification of
Education, or five years of duly proven professional experience.

19
PORTUGUESE ENGLISH
II - Outras actividades profissionais:
Administradores e gestores de empresas promotoras de investimento
produtivo, desde que afectos a projectos elegíveis e com contractos de
concessão de benefícios fiscais celebrados ao abrigo do Código Fiscal do
Investimento, aprovado pelo Decreto-Lei n.º 162/2014, de 31 de
Outubro.
II – Other professional activities:
Directors and managers of companies carrying out productive
investment activities may also benefit to the extent that they are
engaged in the projects for which contractual tax benefits have been
granted under the Investment Taxation Code (Código Fiscal do
Investimento) enacted by Decree-Law nr. 162/2014, of 31 October
2014.

Order nr. 12/2010, of 7 January)
20
PORTUGUESE ENGLISH
1 - Arquitectos, engenheiros e técnicos similares:
101 – Arquitectos
102 – Engenheiros
103 – Geólogos
1 - Architects, engineers and similar technicians:
101 – Architects
102 – Engineers
103 – Geologists
2 - Artistas plásticos, actores e músicos:
201 – Artistas de teatro, bailado, cinema, rádio e televisão
202 – Cantores
203 – Escultores
204 – Músicos
205 – Pintores
2 - Visual artists, actors and musicians:
201 – Theater, ballet, film, radio and television Artists
202 – Singers
203 – Sculptors
204 – Musicians
205 – Painters
3 - Auditores:
301 – Auditores
302 – Consultores fiscais
3 - Auditors
301 – Auditors
302 – Tax Consultants

21
PORTUGUESE ENGLISH
4 - Médicos e dentistas:
401 – Dentistas
402 – Médicos analistas
403 – Médicos cirurgiões
404 – Médicos de bordo em navios
405 – Médicos de clínica geral
406 – Médicos dentistas
407 – Médicos estomatologistas
408 – Médicos fisiatras
409 – Médicos gastroenterologistas
410 – Médicos oftalmologistas
411 – Médicos ortopedistas;
412 – Médicos otorrinolaringologistas
413 – Médicos pediatras
414 – Médicos radiologistas
415 – Médicos de outras especialidades
4 - Doctors and dentists:
401 – Dentists
402 – Analyst Doctors
403 – Surgeons
404 – Board doctors in ships
405 – General Practitioners
406 – Dentists
407 – Dentist Doctors
408 – Physiatrists
409 – Gastroenterologists
410 – Ophthalmologists
411 – Orthopaedists
412 – Otorhinolaryngologists
413 – Paediatricians
414 – Radiologists
415 – Doctors in other specialties

22
PORTUGUESE ENGLISH
5 - Professores:
501 – Professores universitários
5 - Teachers:
501 – University professors
6 - Psicólogos:
601 – Psicólogos
6 - Psychologists:
601 – Psychologists
7 - Profissões liberais, técnicos e assimilados:
701 – Arqueólogos
702 – Biólogos e especialistas em ciências da vida
703 – Programadores informáticos
704 – Consultoria e programação informática e actividades
relacionadas com as tecnologias da informação e informática
705 – Actividades de programação informática
706 – Actividades de consultoria em informática
707 – Gestão e exploração de equipamento informático
708 – Actividades dos serviços de informação
709 – Actividades de processamento de dados, domiciliação de
informação e actividades relacionadas/portais Web
7 - Professional services, technicians and similar:
701 – Archaeologists
702 – Biologists and experts in life sciences
703 – Computer Programmers
704 – Consulting and computer programming and activities related to
information and computer technology
705 – Computer programming activities
706 – Computer consultancy activities
707 – Management and operation of computer equipment
708 – Activities of information services
709 – Activities of data processing, hosting information and related
activities/Web portals

23
PORTUGUESE ENGLISH
710 – Actividades de processamento de dados, domiciliação de
informação e actividades relacionadas
711 – Outras actividades dos serviços de informação
712 – Actividades de agências de notícias
713 – Outras actividades dos serviços de informação
714 – Actividades de investigação científica e de desenvolvimento
715 – Investigação e desenvolvimento das ciências físicas e naturais
716 – Investigação e desenvolvimento em biotecnologia
717 – Designers
710 – Activities of data processing, hosting information and related
activities
711 – Other information service activities
712 – Activities of news agencies
713 – Other information service activities
714 – Scientific research and development
715 – Research and development of science physical and natural
716 – Research and development in biotechnology
717 – Designers
8 - Investidores, administradores e gestores:
801 – Investidores, administradores e gestores de empresas promotoras
de investimento produtivo, desde que afectos a projectos elegíveis e com
contratos de concessão de benefícios fiscais celebrados ao abrigo do
Código Fiscal do Investimento, aprovado pelo Decreto -Lei n.º 249/2009,
de 23 de Setembro
802 – Quadros superiores de empresas
8 - Investors, administrators and managers:
801 – Investors, administrators and managers of companies
promoting productive investment, if allocated to eligible projects
under tax benefits contracts awarded under the Tax Code for
Investment, approved by Decree-Law No. 249/2009, of 23
September
802 – Senior employees of companies

24
The Portuguese gastronomy is as rich and
diverse as its heritage and landscapes and has
recently been internationally recognised with
33 Michelin star restaurants, totaling 34 stars,
in 2022. (10)
Portugal is also one of the best wine tourism
destinations. Our country had 675 prizes at
the 2022’s Decanter World Wines Awards
(DWWA) (11) and also achieved 296 Medals in
the 2022’s Concours Mondial de Bruxelles. (12)
#06
Gastronomy
Why Portugal?
(10) - https://guide.michelin.com/pt/pt_PT/article/news-and-views/novidades-guia-michelin-portugal-2022
(11) - https://awards.decanter.com/DWWA/2022/
(12) - http://results.concoursmondial.com/index.php

▪ A Portuguese tax resident, even if with NHR status, with employment or director income is liable to
Portuguese social security contributions levied on the gross salary, being that the employee / director is
deducted a contribution of 11% from that salary and the employer has to pay an extra 23,75% (normal
entities) or 22,3% (non-profit entities) on top of the salary paid.
▪ A Portuguese tax resident, even if with NHR status, providing independent personal services will also be
liable to Portuguese social security payments. As a rule, self-employed individuals must declare their
income to Social Security each quarter. The relevant income corresponds to the average income of the
previous three months, based on a coefficient of 0,70 for freelancers in services or a coefficient of 0,20
for sole traders in production and sales (or tourism). The contribution rate is 21,4%. Independent
workers can opt to adjust the tax base up or down by as much as 25%. In the case of self-employed
individuals with standard accounting (“contabilidade organizada”), the relevant income corresponds to
1/12 of the taxable profit calculated in the previous year, with a minimum limit of 1.5 X the IAS (social
support index), i.e. € 664,80 (for 2022). Nevertheless, these taxpayers may opt for the quarterly scheme.
In any case, the monthly contribution base cannot exceed 12 times the IAS and therefore the maximum
monthly contribution for 2022 is € 1.138,14 (21,4% of € 5.318,40).
25
Social Security

(13) - https://universitas21.com/sites/default/files/2020-
04/U21_Rankings%20Report_0320_Final_LR%20Single.pdf
(14) - www.ef.edu.pt/epi/regions/europe/portugal/ 26
A large part of the population speaks foreign languages,
especially English, Spanish and French.
Portugal was ranked 7th out of 112 countries in the EF
Global English Proficiency Index 2022. (14)
There is a significant number of International Schools
throughout Portugal, attended by both Portuguese and
foreign students.
Portugal is ranked as the 25th best in the World
according to the 2020 U21 Ranking of National Higher
Education Systems. (13)
#08
Other Languages Spoken
#07
Education
Why Portugal?

Other Attractive Features of the Portuguese
IRS Taxation of Individuals
▪ Several other attractive features exist in the Portuguese taxation system of individuals.
▪ Firstly, several capital gains are excluded from IRS taxation:
▪ The sale of movable assets acquired in a private capacity, like art, antiques, classic cars, jewelry and crypto
assets is not subject to IRS. This presents interesting opportunities for investors in art and crypto assets
holders.
▪ The capital gains on the sale of a taxpayer's personal and permanent house are not subject to IRS, if the
sale proceeds are reinvested in another personal and permanent house in the Portuguese territory,
European Union or European Economic Area territory (in the latter case if there is an instrument providing
for exchange of information between the tax authorities of both States in terms similar to the ones in
force within the European Union).
▪ Alternatively, those sale proceeds may be reinvested as contributions to the public capitalization regime,
to a life insurance contract or to a pension fund which generates periodic payments, provided that the
taxpayer or his/her spouse or civil partner is at least 65 years old or is retired.
▪ It is also necessary that the investments’ aim is to exclusively provide the subscriber or his/her spouse or
civil partner with regular installments for a minimum period of 10 years, with a maximum annual amount
of 7.5% of the invested amount.
27

Other Attractive Features - another special
tax regime for returning individuals
▪ A favorable tax regime was enacted for former Portuguese tax residents who decide to return to Portugal
between 2019 and 2023.
▪ A tax exemption on 50% on the employment and self-employment income, applicable to individuals who:
▪ have been deemed as tax residents in Portugal until the 31 December 2018 or 2019 (depending on
the first year of residency – 2022 or 2023 - respectively);
▪ return to Portugal in 2022 or 2023 and meet the criteria to qualify as tax residents herein under the
applicable tax residence rules;
▪ have not been deemed as residents in the previous 3 years;
▪ have not applied for the NHR tax status;
▪ have the Portuguese tax situation in good standing.
▪ Such exemption shall be valid for a 5-year period and can be an option for those who do not meet the
criteria to obtain the NHR status or are partially excluded from it (e.g. Sportspersons).
28

29
About 300 daily flights from Portugal to
foreign countries.
Porto Airport ranks among the best airports
in Europe since 2006. (15)
Portugal ranked 16th among 117 countries
in the 2021 WEF Travel & Tourism
Competitiveness Index. (16)
#09
Daily Flights
#10
Convenient Location
for Globetrotters
Why Portugal?
(15) - https://aci.aero/programs-and-services/asq/asq-awards-and-recognition/
(16) - https://www3.weforum.org/docs/WEF_Travel_Tourism_Development_2021.pdf

▪ Widening of the exemptions for foreign-sourced income, to encompass:
― all passive income (interest, dividends, certain royalties, other income from capital, capital
gains on any foreign asset, including shares, and income from immovable property), regardless
of the liability to potential taxation at source under an existing DTT or the OECD Model Tax
Convention;
— independent personal services income of any kind, provided that it is potentially liable to
taxation in the source State under the rules of a DTT or of the OECD Model Tax Convention.
▪ Inclusion of actuaries, airline pilots and directors and managers of all companies, regardless of
their activity sector and of the existence of a tax benefit contract with the Portuguese State, in the
list of high value added activities of a scientific, artistic or technical nature which qualify non-
exempt employment and independent personal services income for the special 20% flat rate.
30
2015 Proposals by the IRS Reform Commission (the 1st
was rejected by the previous Government; the 2nd was
considered in the new list of high value-added activities
of Ministerial Order nr. 230/2019, of 23 July
(see slide 16 above)

31
Top conditions for sports (sailing, diving, biking, trekking,
horse riding, golf - with some of the best World courses (17)).
#11
Sports
Why Portugal?
(17) - https://worldgolfawards.com/award/world-best-golf-destination/2018
https://worldgolfawards.com/award/world-best-golf-destination/2017

Procedure to Register as Tax Resident in Portugal
▪ Registering as a tax resident in Portugal is a requirement to obtain the NHR status, which means that those wishing
to apply for the regime must:
i. register as non-resident taxpayers (optional in some cases);
ii. obtain residence permits (for non-EU nationals) or long-term residence certificates (for EU and Swiss
nationals);
iii. register as tax residents;
iv. request the password to access the tax authorities’ website; and
v. only then apply for the NHR status.
▪ Applications must be submitted until 31 March of the tax year following that in which Portuguese tax residence is
acquired. Since 2 August 2016, the applications have to be submitted on the tax authorities’ website.
▪ Moreover, individuals must submit a statement whereby they solemnly declare that they have not fulfilled the
criteria necessary for being considered a Portuguese tax resident during the preceding five years.
32

Proof of Portuguese Tax Residence
▪ As of the moment an individual is registered as a Portuguese tax resident, he will not be required to provide
evidence of his/her residence to the Portuguese Tax Authority, since, in principle, they will not challenge such
status.
▪ However, the Portuguese tax residence could be challenged by an income source State, especially if one spends
time in that State. In this regard, a number of precautions are advisable:
i. keeping a calendar that tracks one’s days of stay in Portugal and in other countries;
ii. avoiding short-term rentals and frequent address changes within the Portuguese territory from the
moment one becomes a tax resident herein;
iii. ask for invoices with the Portuguese tax number (NIF) on a recurring basis when one acquires
products/services in Portugal.
▪ The latter will allow the individual (a) to better prove his/her effective presence in Portugal, if challenged, (b) to
benefit from certain deductions on the Portuguese tax assessment, if he/she has taxable income at standard tax
rates, and (c) also make him/her eligible for a State lottery!
33

(18) - https://www.numbeo.com/cost-of-living/country_result.jsp?country=Portugal 34
Value for money in real estate investments (which
have undergone significant decreases from 2008 to
2015).
In comparison with other major European
countries, Portugal is highly affordable. (18)
#12
Investments
#13
Cost of Living
Why Portugal?

Standard legal and tax step plan on becoming a
Portuguese non-habitual tax resident
35
▪ Two official guides on the NHR Regime
from the Portuguese Tax Authority are
available (one on the registration and
another on the tax regime itself). The
English versions may be found here (on
registration) and here (on the tax
regime). The French versions may be
found here (on registration) and here
((on the tax regime).
▪ An official guide on the request of the
password to access the Portuguese Tax
Authority’s website is also available in
English here and in French here.
1
▪ Advice on double residence and taxation of income and wealth
2
▪ Obtain a Portuguese non-resident taxpayer number (appointing a tax
representative if necessary) – Optional, in some cases
3
▪ Legal assistance in the purchase or lease of real estate
4
▪ Obtain a residence permit (for non-EU nationals) from the Foreigners and
Borders Service or a long-term residence certificate (for EU nationals) from
the local city council
5
▪ Register as resident taxpayer
6
▪ Request the password to access the tax authorities’ website
7
▪ Submit an application to the NHR regime
8
▪ Obtain Portuguese tax resident certificates and file a non-resident tax
application in the country of origin
9
▪ Activate the Electronic Post Box
10
▪ File annual tax returns

Procedure to Register in the Portuguese National
Health System
▪ A Portuguese NHR can benefit from the Portuguese national health system. Those wishing to take
advantage of this should request a Health Card – with no associated cost – in the nearest Health Centre and
bring:
i. Their passport;
ii. Their residence permit (for non-EU nationals) or long-term residence certificate (for EU nationals);
iii. The tax document evidencing their Portuguese taxpayer number; and
iv. A proof of residence such as a utility bill (water, electricity or gas, for example).
▪ Once the mentioned Health Card is obtained, the following services become available at public hospitals
and health centers:
i. Health care;
ii. Appointment of medical exams; and
iii. Obtaining of prescriptions.
36

Driving License
▪ Drivers must request the exchange of the foreign driving license to a Portuguese one 90 days
after obtaining residence in the Portuguese territory. This exchange is made without the need
to carry out any driving test. More information is available here (in Portuguese).
▪ Nonetheless, holders of driving licenses issued by Member States of the Community of
Portuguese Speaking Countries (CPLP) or the Organization for Economic Cooperation and
Development (OECD) may drive in Portugal with the respective driving license without the need
to obtain a Portuguese one. More information may be found here (in Portuguese).
▪ Hiring a Solicitador to deal with this is highly recommended.
37

Car Importation
▪ From the moment one becomes a tax resident in Portugal, he / she has 12 months (previously,
before 1January 2018, 6 months) to begin the procedure to tax free import a car. One has to
prove that he/she owned the vehicle for more than 6 months (previously 12 months) before
becoming a tax resident in Portugal and also prove that one lived in the country where the car
was registered for that same 6-month period (again, previously 12 months).
▪ Hiring a customs agent to deal with this is highly recommended.
38

Procedure to Request the European Card for
Social Security Health Insurance (EHIC)
▪ The EHIC gives access to medically necessary, state-provided healthcare during a temporary stay in
any of the 27 EU countries, the UK, Iceland, Liechtenstein, Norway and Switzerland, under the same
conditions and at the same cost (free in some countries) as that of people insured in that country;
▪ For Portuguese tax residents (even if non-EU citizen), the EHIC is issued by the Portuguese Social
Security, subject to the following requirements:
– To have a Portuguese national health system number; and
– To be insured or covered by the Portuguese Social Security (for instance, those who work in
Portugal or who make voluntary Social Security contributions).
▪ The EHIC may by requested:
– Via the Social Security website (Segurança Social Direta - https://app.seg-social.pt/sso/login); or
– At the Social Security service counters or any branches of Citizen Shops.
▪ The EHIC is valid for 3 years.
39

(19) - https://www.pordata.pt/en/Europe/Life+expectancy+at+birth+total+and+by+sex-1260 40
Portugal has a high quality
health system, offering
both public and
private healthcare.
According to PORDATA data base,
the average life expectancy at
birth in Portugal in 2021 was 81,2
years. (19)
#14
Health System
Why Portugal?

Taxation of financial income:
summary
41
*Assumptions: (i) Investment Funds (I.F.) are considered persons for Corporate Income or Capital Tax purposes and
DTT residents of a Contracting State; (ii) income derived from the distribution of profits by I.F. is subject to the same
tax treatment as income from shares; (iii) redemption of I.F. participation units or shares is not treated by the
Source State as a distribution of profits. (See the next slide for more details)
** Only from 1 January 2023 onwards.
▪ In short: plain-vanilla dividends and interest from jurisdictions with whom Portugal has entered a DTT with,
are exempt from IRS under the NHR regime; other financial income, namely capital gains on shares and on I.F.
participation units may not be.
OECD Model Characterization
NHR – foreign source income taxation in
Portugal assuming such Characterization
and the Model allocation of taxing
rights
Shares: distribution of profits to the
shareholders / Investment Funds*: distribution
of profits
Dividends Exempt
Shares: alienation / Investment Funds*:
redemption and alienation / Bonds: windfall
gains
Capital gains
Not exempt.
Non-short-term: 28% rate
Short-term: progressive rates apply**
(please see slides 45 and 46)
Bonds / Bank deposits / Insurance with
guaranteed capital / Certificates that assure
the holder a minimum value above the
subscription amount
Interest Exempt
Certificates without guaranteed capital /
Insurance without guaranteed capital /
Derivatives / Warrants
Capital gains / Other Income Not exempt (28% rate)

Taxation of non-habitual resident participants’
income in non-Portuguese investment funds
The periodic distributions made by I.F. to the beneficiaries of the NHR scheme will be exempt from IRS
only if:
▪ the I.F. are organized in a State that has entered a DTT with Portugal or, in the absence of one, in a
jurisdiction that is not included in the so-called Portuguese blacklist of tax havens; and
▪ the I.F. are subject to income tax (or capital tax, in some cases - depending on the applicable DTT) as
DTT persons in the jurisdiction of organization being, consequently, residents of a Contracting State for
the purpose of a DTT entered into with Portugal; and,
▪ the distributions can be qualified as “dividends” for the purposes of the relevant DTT, either because
the units in the I.F. are shares (namely when the latter is organized as a self-managed company and not
as an autonomous estate run by an I.F. managing company), or because they are considered rights
participating in profits or, finally, because they benefit from the same tax regime in the State of source
that is applicable to income derived from shares.
42

▪ In case the distributions do not qualify as “dividends” or “interest” for the purposes of the applicable
DTT, they qualify as “other income” for such purposes and the DTT provision allows the State of Source
to tax.
▪ If one or more of the above conditions are not met, I.F. distributions to the NHR will be taxed at a rate
of 28%, falling within the DTTs’ provision of “other income” (and no longer as “dividends”). Most DTTs
establish an exclusive competence of the State of residence of the recipient to tax this “other income”,
which prevents the tax exemption for the NHR in Portugal, as State of residence.
▪ Regarding income derived from a redemption of units in an I.F. against the I.F. itself, or the sale of the
I.F. units to a third party, this, as a rule, qualifies as “capital gains” for the purposes of a DTT. Most DTT
establish an exclusive competence of the State of residence of the alienator to tax “capital gains”. This
prevents a tax exemption for the NHR in Portugal, the income concurring for the gain and loss balance
which will be IRS taxed, at the rate of 28% or, in the case of short-term capital gains, at progressive rates
up to 48% (plus additional solidarity rate of 2,5% on taxable income above € 80.000 and of 5% above €
250.000).
43
Taxation of non-habitual resident participants’
income in non-Portuguese investment funds

Taxation of financial income: the issue of capital gains
▪ Law nr. 15/2010, of June 26, has abolished a long-standing IRS exclusion for capital gains on shares
held for more than 12 months. This has relevant consequences for the NHR regime, as its tax exemption
for capital gains was built with that exclusion in mind and in such a way that it is only applicable to
capital gains that may be taxed in the source State under the rules of a DTT entered into by Portugal (or,
if no treaty exists, according to the rules of the OECD Model Tax Convention). However, a long-standing
IRS exclusion for capital gains on foreign shareholdings and other securities acquired before 1st January
1989 remains.
▪ According to the above, most capital gains on foreign shareholdings and other securities acquired after
1 January 1989, including Investment Funds’ participation units or shares, and income from capital
other than plain-vanilla dividends and interest, despite originating in DTT jurisdictions, may remain
taxable in Portugal, even under the NHR regime, as normally both Portuguese DTTs and the OECD
Model Tax Convention establish in this case that the residence State has exclusive competence to tax.
Deviations from the OECD Model, namely those enabling the source State taxation of capital gains on
securities or other income, will, interestingly, enable NHR exemptions to encompass those items (this
is the case of the DTT with Brazil, Sweden and India, among others).
44

45
▪ Short term capital gains – According to the former regime, the balance of capital gains and losses
(when positive) arising from these types of operations was, in principle, taxed at a 28% tax rate (but
capital gains deriving from the reimbursement of bonds or other debt securities and from the
redemption of participation units in investment funds or the liquidation of such funds, when the
securities’ issuer is in a blacklisted jurisdiction, were taxed at a 35% tax rate). Taxpayers could opt to
subject the referred capital gains to progressive rates if they so intended (depending on the taxable
amount, the subjection to progressive rates could be more beneficial than the 28% flat rate).
However, under the State Budget Law for 2022, the balance of capital gains and losses (when positive)
on these types of operations (including those when the issuer is in a blacklisted jurisdiction) is
mandatorily taxed under the progressive tax rates if:
i. The securities are held for a period of less than 365 days; and
ii. The taxable income (namely pensions which are not NHR exempt or NHR taxed under the 10%
tax flat rate and employment or self-employment income not subject to the special NHR tax rate
of 20% for high value added activities), including the balance of capital gains and losses itself
(when positive) on these securities held for a period of less than 365 days, is € 75.009 or higher.

46
▪ Short term capital gains (cont.) – The progressive tax rates vary from 14,5% (for income up to € 7.116)
to 48% (for income above € 75.009). Additional “solidarity” rates of 2,5% and 5% are applicable to
taxable income above € 80.000 and in excess of € 250.000, respectively.
▪ Notwithstanding the above, if the realized balance from the above listed operations results in a
global capital loss, such amount may still be carried forward for 5 years to offset future capital gains.
▪ The above does not apply to derivatives, warrants and certificates that grant the holder the right to
receive a value of a certain underlying asset. Therefore, capital gains arising from these transactions
will maintain taxation at the 28% tax rate.
▪ These new rules will take effect as from 1 January 2023, i.e., they will apply to capital gains and
losses obtained in the calendar and fiscal year of 2023.

47
▪ Tax transparent entities – those not considered standard taxpayers for Corporate Income Tax purposes,
their income flowing directly to their owners / shareholders. The qualification / characterization of these
entities and their income in a cross-border context may raise complex issues for the NHR regime and
even hinder the possibility to obtain exemptions.
▪ Tax haven entities – those blacklisted as such by a Portuguese Ministerial Order. Definitely to avoid: (i)
their dividend, interest, capital gain (deriving from the refund of bonds and other debt securities and
from the redemption of participation units in investment funds or the liquidation of such funds or other
capital income) will not be exempt under the NHR regime but will be taxed at a 35% autonomous rate
(with the exception of dividend and interest income arising from those tax havens that have entered into
tax treaties with Portugal - Andorra, Bahrain, Barbados, the United Arab Emirates, Kuwait, Panama,
Oman, Qatar, San Marino, Uruguay and Hong Kong -, whose income may still be exempted); (ii) losses on
the sale of shares, securities, autonomous warrants and certificates are not deductible when the
counterparty in the sale operation is located in a tax haven; (iii) a shareholder of a tax haven entity risks
the application of Portuguese Controlled Foreign Companies’/Entities’ (CFE / CFC) rules.
Taxation of financial income: some pitfalls

Jurisdictions in yellow have entered Double Taxation Conventions with Portugal, that are in force.
Anguilla Guyana Puerto Rico
Antigua and Barbuda Honduras Qatar
The Netherlands Antilles Hong Kong The Solomon Islands
Aruba Jamaica American Samoa
Ascension Jordan Samoa
The Bahamas The Queshm Island St. Helena
Bahrain Kiribati St. Lucia
Barbados Kuwait St. Kitts-Nevis
Belize Labuan San Marino
Bermuda Lebanon St. Pierre and Miguelon
Bolivia Liberia St. Vincent and the Grenadines
Brunei Liechtenstein The Seychelles
The Channel Islands (Alderney, Guernsey,
Jersey, Great Sark, Herm, Little Sark, Brechou,
Jethou and Lihou)
The Maldives Swaziland
The Isle of Man
Svalbard Islands (Spitsbergen archipelago and
the Bjornoya island)
The Northern Marianas Islands
The Cayman Islands The Marshall Islands Tokelau
The Cocos o Keeling Islands Mauritius Tonga
The Cook Islands Monaco Trinidad and Tobago
Costa Rica Montserrat Tristão da Cunha Island
Djibouti Nauru Turks and Caicos Islands
Dominica Natal Tuvalu
United Arab Emirates Niue Uruguay
The Falkland Islands Norfolk Island Vanuatu
Fiji Oman The British Virgin Islands
Gambia Palau The U.S. Virgin Islands
Grenada Panama Yemen
Gibraltar Pitcairn Island “Other Pacific Islands not specifically
mentioned”
Guam French Polynesia
Taxation of financial income: some pitfalls – tax
havens’ blacklist

▪ Derivatives / warrants / certificates without guaranteed capital / complex or structured
products (that qualify as securities) – their presence in investment portfolios generates income
characterized as capital gains or other income for DTT purposes which, as already explained, is not
normally NHR exempt.
▪ Foreign exchange – The IRS treatment of foreign exchange gains and losses is not altogether clear.
Pure foreign exchange gains, i.e. those deriving from spot currency transactions, are not liable to
IRS in Portugal for a private investor. Most tax advisors also consider that foreign exchange gains
or losses embedded in the assets’ sales have to be segregated from the nominal gains or losses
and excluded from IRS but there are diverging views that consider that there is a risk of such
embedded gains or losses being taxable, due to the need to report income in Euro for IRS
purposes.
49
Taxation of financial income: some pitfalls

▪ The wealth management area is complex as (a) there are lots of types of financial instruments; (b)
when dealing with foreign products one has to make an effort to understand them and to qualify
their income for purposes of the Portuguese domestic tax regime, including the NHR, as well as
that of the DTTs; (c) Portugal has different baskets for capital income and capital gains and many
limitations on the offsetting and carrying forward of losses; (d) this tax compliance, even if there is
an income exemption of the product under the NHR regime, is in itself an extra burden,
represented by the tax consultants’ time / fees.
▪ Despite the NHR regime being frequently marketed as a “world of ease” it is very important to:
(i) properly plan direct financial investments [NHR educating the asset manager to aim at
dividends and interest from companies liable to Corporate Income Tax and not resident in
blacklisted jurisdictions. Indeed, even so-called “dividends” and “interest” arising from foreign
companies that are not in themselves taxed (either because they are not liable to Corporate
Income Tax – a problem that is common in the I.F. industry, where many funds are tax excluded or
exempt – or because they are in tax havens) may not be exempt under the NHR regime and might
be taxed at a 28% or 35% rate instead; or
Taxation of financial income: conclusions
50

(ii) depending on the type of investments, the size of the financial portfolios and also on the
number of annual operations of purchase and sale to be made, it may be worthwhile to consider
setting up wealth management products / structures, namely through the use of wrappers /
envelopes (such as unit-linked life insurance / portfolio management companies / certain
certificates), that hold the financial portfolio, enabling a more pure “mathematical” or
“accounting” profit to be achieved, creating a veil between the investor (and his/her IRS
statement) and his/her investments, avoiding the previous slide complexities and allowing for the
investments not to be tax reported / to be tax deferred until there is a withdrawal of funds from
the insurance policy itself or a dividend distribution from the company. In an unit-linked insurance
policy, when the withdrawal occurs, there may exist some small taxation under the NHR regime
but there will just be one line of income to report in the IRS statement (annual insurance policy
fees will nevertheless apply). In the case of a company, the dividend should be NHR exempt (but
of course management and accounting fees will apply). Regarding certificates, income derived
from them, as long as they assure the holder a minimum value above the subscription amount,
should be qualified as a DTT interest and be NHR exempt. If that is not the case the income so
derived will be a DTT capital gain or other income and consequently taxable at a 28% IRS
autonomous rate.
51

▪ As most capital gains on shareholdings, securities and other financial instruments will generally
remain taxable in Portugal under the NHR regime, it is important that any existing wealth
management structures are assessed or that new structures are set up before the individual
moves to Portugal.
▪ Bank account custody and maintenance fees, as well as asset management fees, will not be
deductible for IRS purposes (only transaction fees specific to the purchase and sale of shares in
companies and other securities are).
▪ Existence of tactical opportunities for offsetting taxable capital gains (v.g. in securities) with
taxable losses (v.g. in other securities but also in real estate).
▪ Portugal corrects the acquisition value on shares in companies (but not on other types of
securities) according to currency devaluation coefficients that reflect the evolution of inflation
over the years. Accordingly, the nominal gain on shares is not equivalent to their taxable gain.
52

Pension income Vs Labour Income Vs Financial income
53
▪ Pensions are “odd animals”:
▪ There are many types of pensions and not all things that one may believe as such will be so,
e.g., special retirement products or retirement bank accounts may qualify as capital income
and not as true pensions.
▪ Income qualified as a pension by the source State may not meet the requirements of the
DTT or even the Portuguese IRS Code definitions of pension. As the NHR is a Portuguese
unilateral regime for relief from international double taxation, the income qualification for
this purpose may have to be made in accordance with Portuguese domestic law, and not in
accordance with DTTs or the source State’s view.
▪ For instance, income of investment products provided by an insurance company where (i)
the funding contributions were exclusively made by the beneficiary with no link to a
previous employment, or/and (ii) the capital is not guaranteed, or/and (iii) there is the
possibility of redemption, may not be exempt under the NHR regime, depending on the DTT
in force.

54
▪ According to the IRS Code, lump sum payments made by pension funds previously funded
by employer contributions may be regarded as employment income. This may apply to the
part paid out from the pension fund which derives from contributions not taxed at
entrance.
▪ For NHR individuals that entered the regime prior to the State Budget Law for 2020, which
introduced the provision stating that lump sum payments, as referred above, are taxed at a
10% tax rate, the qualification of that income as employment or pension income may have
a huge impact on its taxation.
Pension income Vs Labour Income Vs Financial income

▪ A renegotiation of DTTs between Portugal and other States is currently an issue with two Nordic
countries, and is driven by the double non-taxation of private pensions allowed by the
combination of the NHR regime with DTTs following the OECD Model Tax Convention.
▪ The likelihood of a unilateral termination of an existing DTT is very reduced.
▪ However, recently, Finland terminated the DTT with Portugal. Its application ceased from the start
of 2019. There is no longer a restriction to Finland’s right to tax private pensions received from
Finland. Also, Finland is now able to tax income from the rent or gains on the sale of shares in
housing-companies [asunto-osakeyhtiö] (i.e., income from residential apartments). Previously
Finland could only tax income from real estate, such as a detached house.
▪ A new treaty with Finland with an amendment to the private pension article of the DTT was
already accepted by the Portuguese Government but was not yet adopted by the Portuguese
Parliament.
Pension income and the possibility of renegotiation /
termination of the DTT between Portugal, as my
residence State, and the Pension source State
55

▪ Sweden terminated the DTT with Portugal. Its application ceased from 1 January 2022. There is no
longer a restriction to Sweden’s right to tax private pensions received by NHR from Sweden.
▪ These amendments will allow Finland and Sweden, as source States of private pension income, to
impose tax on it. These amendments also motivated Portugal to unilaterally change its domestic
NHR regime in 2020, starting to impose tax at a 10% rate on foreign-sourced pensions for entrants
into it that became Portuguese tax resident as from 1 April 2020.
▪ Currently, no other States have publicly signaled a will to revise their DTTs with Portugal due to the
NHR regime but we are aware that some negotiations in this regard are taking place with France and
Germany.
56
Pension income and the possibility of renegotiation /
termination of the DTT between Portugal, as my
residence State, and the Pension source State

Taxation of crypto-currencies: developments
57
▪ The Portuguese Tax Authority acknowledged via binding ruling that the gains derived from the
trading of crypto-currency are not taxable either as capital income (Schedule E of the IRS Code) or
capital gains (Schedule G of the IRS Code), as long as the trading of cryptocurrency is not frequent.
▪ Only if the trading of crypto-currency is frequent would it be considered a self-employment /
business activity, taxable under Schedule B of the IRS Code under the general progressive tax rates.
▪ This feature (non-taxation of capital gains of sale of certain assets held in a private capacity, even if
“digital”, or of gains on foreign exchange), is a general feature of the Portuguese IRS, and not
particular to the NHR regime.
▪ Apparently, even if the trading is frequent but only involves crypto for crypto (and not crypto for
fiat), the Portuguese Tax Authority does not consider it taxable.
▪ Income from depositing, lending or temporarily providing liquidity in cryptocurrencies in principle
is a taxable and reportable capital income in Portugal but if such income qualifies as an “interest” it
may be tax exempt for the NHR individual.

▪ The Portuguese Tax Authority has recently acknowledged via rulings that:
▪ Income generated during the lifetime of a Trust and distributed to Portuguese resident individuals is
qualified as capital income (schedule E of the IRS Code) and subject to tax at a flat rate of 28%.
Distributions from Trusts domiciled at blacklisted jurisdictions are taxed at a 35% rate.
▪ Transfer of assets from the Trust to the settlor, arising from liquidation, revocation or termination of the
structure, are qualified as a capital gain (Schedule G) – taxed at flat rate of 28%. When the Trust was
domiciled at a blacklisted jurisdiction the capital gain is taxed at a 35% rate.
▪ Transfer of assets from the Trust to a beneficiary other than the settlor, arising from liquidation,
revocation or termination of the structure, are excluded from IRS taxation. Such distributions are
qualified as a gratuitous transfer of assets potentially liable to Stamp Tax only if such assets are located in
Portugal. Therefore, Portuguese tax resident beneficiaries of a Trust of which they were not settlors will
not be taxable in Portugal if only non-Portuguese assets are attributed to them.
▪ The State Budget Law for 2022 enacted an anti-abuse law that clarified the following:
i. The amount attributed to the settlor as a result of the liquidation, revocation, or extinction of a trust, as
well as the gains resulting from the onerous assignment of rights, including the onerous assignment of
the trust beneficiary's position, become liable to a flat rate of 35% provided that the trust is domiciled in
a jurisdiction included in the Portuguese tax havens’ blacklist. The trust is deemed to be domiciled in a
blacklisted jurisdiction if the registered office or place of effective management of the trustee is located
there or, if the trustee is an individual, is considered resident there for tax purposes (as opposed to a
possible alternative view: the trust being domiciled in a blacklisted jurisdiction on the basis of the
settlor’s choice of governing law).
Taxation of trusts: recent developments
58

▪ The impact of these developments in the NHR regime:
▪ Income generated and distributed from Trusts to NHR individuals should, in general, be qualified as
capital income (schedule E of the IRS Code) and as “Other Income” for purposes of the OECD Model Tax
Convention.
▪ This implies that, in most Portuguese DTTs, this income (as explained above for capital gains – see slide
41) will remain taxable in Portugal at the said 28% rate, as normally both those treaties and the OECD
Model Tax Convention establish in this case that the residence State has an exclusive competence to tax.
Deviations from the OECD Model, namely those enabling source State taxation under the “Other
Income” provision, will, interestingly, even if no effective taxation exists, enable NHR exemptions to
encompass these distributions.
Taxation of trusts: recent developments
59

60
Successful conclusion of the Troika’s (International
Monetary Fund, European Central Bank and EU) financial
assistance program (2011-2014) on May 17, 2014.
Portugal is a developed democracy with political and social stability and was
ranked among the countries with the most freedom according to the Freedom of
the World 2022 Report. (20)
Portugal was also ranked 7th out of 179 countries in the 2020 Democracy Report
(21) and was ranked 28th out of 167 countries in the 2021 Economist Intelligence
Unit's Democracy Index. (22)
#16
Economic Progress
#15
Political Stability
Why Portugal?
(20) - https://freedomhouse.org/country/portugal/freedom-world/2022
(21) - www.v-dem.net/media/filer_public/f0/5d/f05d46d8-626f-4b20-8e4e-53d4b134bfcb/democracy_report_2020_low.pdf
(22) - https://en.wikipedia.org/wiki/Democracy_Index

Direct or indirect purchasing of real estate?
▪ Property Transfer Tax (PTT) of up to 7,5% (at higher rates, but with a cap of 7,5%, if not for
permanent housing, and 6,5% if acquired by a company) and Stamp Tax of 0,8% on the price or
taxable value ("Valor Patrimonial Tributário" or VPT), whichever higher.
▪ Property Ownership Tax (POT) at 0,8% for rural real estate and between 0,3%-0,45% for urban real
estate on the taxable value (exemption for permanent housing if the taxable value does not exceed
€ 125.000 for households with a IRS taxable income not higher than € 153.300; on purchase for
resale by companies / entrepreneurs during 3 years).
▪ Stamp Tax on 5 or more year term financing of 0,6%, but exemption applies to interest paid on
permanent housing loans.
▪ The State Budget Law for 2017 enacted, in substitution of the 1% “Luxury” Stamp Tax on housing
real estate with a taxable value above 1 million, an Additional to the Property Ownership Tax
(“APOT”).
61

▪ This new APOT applies to owners, usufructuaries or superficiaries, of urban property for housing
purposes or building land located in Portugal, on January 1st of the relevant year.
▪ Single owners with residential real estate or land for construction in Portugal above € 600.000 of
taxable value are liable to APOT at a 0,7% rate on the surplus of the € 600.000. If the sum of the
taxable values exceeds € 1.000.000, the surplus is subject to a marginal rate of 1%.
▪ Owners which are married or in a civil partnership and choose the joint taxation regime – for
purposes of the APOT – are only liable to APOT if the sum of the taxable value of their real estate is
above € 1.200.000. The APOT applies a 0,7% rate on the surplus of the € 1.200.000. If the sum of
the taxable values exceeds € 2.000.000 the surplus is subject to a marginal rate of 1%.
▪ If the taxpayers obtain income attributable to immovable property subject to the APOT, the latter
may be deducted from the IRS due in respect of rental income (Schedule F) or business income
obtained from rental or hosting activities (Schedule B).
62

▪ If a company holds real estate the APOT rate will be applied on the full taxable value of the real
estate at a rate of 0,4% – not only on the surplus of a threshold.
▪ If the owner is a company and the real estate is simply used by its shareholder/director or any
member of the corporate bodies of such company (including their respective spouses, ascendants
or descendants), the tax rate will be of 0,7% on its full taxable value. If the sum of their taxable
values exceeds € 1.000.000 the surplus is subject to a marginal rate of 1%. If the sum of the taxable
values of the entire immovable properties exceeds € 2.000.000 the surplus is subject to a marginal
rate of 1,5%. In our opinion if the real estate is leased by the company to the shareholder or
director the tax rate will be of 0,4%.
▪ Taxpayers may choose for Corporate Income Tax purposes (IRC): (i) to deduct APOT as an expense;
or (ii) to deduct the APOT from the tax due, limited to the fraction corresponding to the income
generated by that real estate, in the context of rental or hosting activities, and up to that tax due.
63

▪ There are numerous punitive measures on the acquisition and holding of Portuguese real estate by
a blacklisted tax haven company – namely, (i) a PTT rate of 10%, without the possibility of applying
exemptions or reductions; (ii) A POT rate of 7,5% (iii) an APOT rate of 7,5% on the sum of the
taxable values of the real estate, without the possibility of deducting the respective amount
against the IRC due, and (iv) taxation of capital gains on sale at the IRS rate of 35%.
▪ The State Budget Law for 2021 aggravated these punitive measures, as follows:
- POT/APOT deferral in the case of purchase for resale and construction for sale does not apply
if the entities are dominated or controlled, directly or indirectly, by an entity with tax
residence in a blacklisted country.
- The scope of the APOT and PTT aggravated rates (of 7,5% and 10%, respectively) has been
enlarged to encompass the cases of indirect holding by an entity resident in a blacklisted
country (to apply this regime it is necessary to establish a relationship of “dominating
influence” according to the article 486 of the Portuguese Commercial Companies’ Code).
64

▪ Sale of shares in a foreign company holding Portuguese real estate does not trigger PTT / Stamp
Tax, but it can trigger IRS / IRC (see next slide).
▪ Until the 1 January 2021 the sale of shares in a Portuguese incorporated company holding
Portuguese real estate did not trigger PTT / Stamp Tax except if it was a Sociedade por Quotas
(private limited company) and one of the quotaholders obtained 75% of the capital or the number
of holders was reduced to 2 quotaholders, married or living in a civil partnership (in that case PTT
would be due at the rate of 6,5%).
65

▪ The State Budget Law for 2021 equaled the tax treatment between the different legal forms of
commercial companies (“sociedades por quotas”/ “sociedades anónimas”), and therefore PTT will
be due at the rate of 6,5%, if all the requirements bellow are fulfilled:
i. Value test – includes acquisitions of shareholdings of (unlisted) companies, whose real estate
assets are, according to the balance sheet value or if higher, the tax value, directly or
indirectly, composed for more than 50% of real estate assets located in Portugal.
ii. Asset test – provided that real estate assets are not directly allocated to an agricultural,
industrial or commercial activity (exception applies to the purchase and sale of real estate);
iii. Shareholding test – provided that as a result of the acquisition, amortization or any other
facts, any of the shareholders holds at least 75% of the share capital (or the number of
shareholders is reduced to two, married or in civil partnership). Own shares or quotas held by
the company are proportionally attributed to the shareholders according to their
participation in the share capital.
66

▪ In the case of sale of a land rich company:
▪ According to the Portuguese domestic tax rule, if the company’s value is principally derived,
directly or indirectly, in more than 50%, from immovable property situated in Portugal and if
such relevant value threshold is met at any time during the 365 days preceding the
alienation, IRS or Corporate Income Tax is due on capital gains (an exception applies for
property allocated to agricultural, industrial or commercial activities).
▪ However, some Portuguese DTTs envisage exclusive taxing rights for the residence State on
the sale of land rich companies and this did not change with the Multilateral Convention to
Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (“MLI”)
entering into force (e.g., treaties with the United Kingdom, the Netherlands, Belgium and
Luxembourg).
▪ Other Portuguese DTTs also allow for taxation in the State of source (such as the DTTs with
France, Spain, Malta, Ireland and Switzerland). Under the MLI more treaties allow both
countries taxing rights (e.g., DTTs with Germany, Italy and Poland).
67

(23) - https://www.visionofhumanity.org/wp-content/uploads/2022/06/GPI-2022-web.pdf 68
According to the 2022′s
Global Peace Index, Portugal
ranks 6th, out of 163
countries. (23)
#17
Peaceful Country
Why Portugal?

Inheritance and gift
▪ Inheritance and gifts are subject to Stamp Tax in Portugal. However, inheritance and gifts between
close family (spouses, living partners, children, grandchildren, parents and grandparents) are
exempt and assets outside Portugal are not even territoriality taxable. Only in the case of gifts of
Portuguese real estate between close family is there a 0,8% tax on their taxable value. Even when
tax is due on the Portuguese assets (between siblings, cousins, uncle and nephew, etc.) it is so at a
low rate – 10% when an inheritance / 10% plus 0,8% when a gift of Portuguese real estate is
concerned.
▪ In November 2015, the Socialist party, with the parliamentary support of three far-left parties (the
Left Block, the Communist and the Green parties) formed a new Government. The Socialist party
proposed in its electoral program the reintroduction of inheritance taxation between spouses and
direct line descendants for “high value” estates (in principle those with a taxable value above 1
million Euros, with a rate of 28% applying to the surplus), but “taking into account the need to avoid
phenomena of multiple inheritance taxation”. It was therefore possible that a mild form of
inheritance taxation might be re-introduced in Portugal, but it was not clear how it would target
NHR with non-Portuguese assets, due to the caveat in commas. 69

Inheritance and gift
▪ Currently, as mentioned, inheritance between close family is tax exempt, assets outside Portugal
are not taxable and when tax is due on Portuguese assets it is so at a low rate - 10%. The
Government Program of 2015 intended to tax those exempt cases (most notably those of
inheritances between close family). However, the relevant aspects remained fully uncertain (for
instance, if foreign assets would be taxed or not, if donations would be taxed in the same way as
inheritances or not, how should the
€ 1.000.000 be valued, etc.).
▪ The 2015-2019 legislature went by and the Government apparently gave up on the idea of
amending inheritance taxation. The Socialist party electoral programs of 2019 and 2022 and the
Socialist Government programs for the 2019-2023 and 2022-2026 legislatures have no mention to
changes in inheritance taxation. Nevertheless, developments on this issue should be monitored.
70

Received by Inheritance Gift
Movable property
Located in Portugal
close family 0% 0%
other people 10% 10%
Not located in Portugal
close family 0% 0%
other people 0% 0%
Real estate
Located in Portugal
close family 0% 0.8%
other people 10% 10.8%
Not located in Portugal
close family 0% 0%
other people 0% 0%
Movable property subject to
registration, license or
inscription
Registered in Portugal
close family 0% 0%
Not registered in Portugal
close family 0% 0%
other people 0% 0%
Credit rights or rights with an
economic content (over
individuals or legal entities)
When the debtor has its residence, head office, effective
management or a permanent establishment in Portugal and, in any
case, provided that the beneficiary is a Portuguese resident.
close family 0% 0%
When the debtor does not have its residence, head office, effective
management or a permanent establishment in Portugal.
Or if the beneficiary is not a Portuguese resident.
close family 0% 0%
other people 0% 0%
71

Shareholdings
In a corporation whose head office or effective management is
located in Portugal or which has a permanent establishment in
Portugal and, in any case, the beneficiary being a Portuguese
resident.
close family 0% 0%
In a corporation which does not have its head office, its effective
management in Portugal or a permanent establishment in Portugal.
Or if the beneficiary is not a Portuguese resident.
close family 0% 0%
other people 0% 0%
Monetary values deposited in
bank accounts
In an institution whose head office, effective management is in
Portugal or which has a permanent establishment in Portugal.
close family 0% 0%
In an institution whose head office and effective management is not
in Portugal and which has not a permanent establishment in
Portugal.
close family 0% 0%
other people 0% 0%
72

Monetary values not deposited
in bank accounts
The transferor has domicile, head office, effective management or a
permanent establishment in Portugal.
close family 0% 0%
The transferor does not have domicile, head office, effective
management or a permanent establishment in Portugal.
close family 0% 0%
other people 0% 0%
Industrial/Intellectual property
rights (and related rights)
Registered or subject to registration in Portugal
close family 0% 0%
Not registered nor subject to registration in Portugal
close family 0% 0%
other people 0% 0%
73

▪ Inheritance or gift will give rise to a new date of acquisition and an assessment of tax value,
relevant for Stamp Tax and for future IRS capital gains (the original date and acquisition value by the
deceased or donor are lost).
▪ In brief, regarding inheritance or gift of real estate located in Portugal:
▪ Directly held real estate:
i) Close family is exempt in the case of inheritance and in the case of gift there is a 0,8% tax on the taxable
value;
ii) Other situations involving the gratuitous disposal are taxed at 10%.
▪ Real estate held through companies. The inheritance or gift of:
i) A foreign (incorporated) company even towards Portuguese residents is not liable (assuming its effective
management is not in Portugal and that the real estate is not a permanent establishment of the
company; otherwise above exemption / 10% rate applies);
ii) A Portuguese (tax resident) company towards non-Portuguese residents is not liable;
iii) A Portuguese (tax resident) company towards Portuguese residents: above exemption / 10% rate
applies.
Other inheritance and gift aspects
74

▪ The State Budget Law for 2022 introduced a new liability to Stamp Tax regarding the inheritance or
gifts of amounts invested in securities and real estate investment funds or in securities and real
estate investment companies.
▪ Nevertheless, these free transfers, despite being subject to tax at a flat rate of 10%, may benefit
from the exemptions mentioned above.
▪ For the purposes of IRS taxation of capital gains on securities (e.g., shares, bonds) acquired through
donations exempt from Portuguese Stamp Tax, the State Budget Law for 2022 also introduced a rule
to determine their acquisition value. In this case, such value is the amount that would be the basis
for Stamp Tax assessment purposes (e.g. in case of exchange-traded shares, the relevant figure is
the listed value), should this be due, up to two years prior to the donation.
▪ The Law does not mention the date of entry into force of the above-mentioned rule and, in case of
absence of an express provision, the change came into force on the day following its publication, i.e.
on 28 June 2022.
▪ It may be contentious whether such rule applies, ex post, in the case of donations having taken
place before 28 June 2022, to the valuation of securities acquired before that date of entry into
force of the Law but which have not yet been sold, and therefore have not yet generated taxable
capital gains.
Other inheritance and gift aspects
75

(24) - https://www.passportindex.org/byRank.php
(25) - https://nationalityindex.com/# 76
If one of the heads of the household qualifies for
residency in Portugal, all the dependents will
automatically qualify.
Moreover, Portugal has one of the world's most
valuable passports (24) and the Portuguese
citizenship was ranked as the 13th most valuable in
the World by Quality of Nationality Index 2018
(QNI). (25)
#18
Portuguese Passport /
Citizenship
Why Portugal?

▪ When tax residence in Portugal is acquired no entry wealth statement has to be made. Furthermore,
in Portugal there is no wealth tax nor any annual wealth statement.
▪ However, IRS forces taxpayers to disclose foreign bank accounts (at least those directly held) in the
annual tax return. There is no need to declare the amounts held in such accounts therein. Only the
BIC and IBAN of such accounts should be declared. The existence of Portuguese bank accounts does
not have to be reported in the annual tax return.
▪ Therefore, a yearly tax return must be submitted until June 30 of each year, starting from the year
following the one in which Portuguese tax residence is acquired.
▪ In this tax return, all worldwide income, obtained in Portugal or abroad, has to be declared (even if
exempt under the NHR regime). For income obtained outside Portugal, not exempt under NHR
regime, tax levied abroad will be considered creditable (with some limitations) against the IRS.
Compliance / Submission of yearly tax returns
77

78
Portugal is an increasingly sought tourist destination. In 2015, it collected 16 awards in the World
Travel Awards for Europe. In 2016, Portugal outdid itself and beat its own record: 24 awards in the so-
called “Oscars” of European tourism. For the 5th time in the last six years, Portugal was voted as the
“Europe's Leading Destination” at those Awards, proving the internationally recognised dynamism,
quality and consistency of tourism in the country. (26)
#19
Tourism
Why Portugal?
(26) - www.worldtravelawards.com/winners/2022/europe www.worldtravelawards.com/winners/2018/europe
www.worldtravelawards.com/winners/2021/europe www.worldtravelawards.com/winners/2017/europe

The Portuguese NHR Regime
For more information on our Residence Planning Services, please visit our microsite
www.nonhabitualtaxresident.com or scan the below QR code with your smartphone:
Should you require further information on this issue please check our Information Note
on this subject, available at https://www.slideshare.net/RPBA/rpba-newsletter-the-
portuguese-nonhabitual-tax-resident-regime-253546943
79

Proper legal advice is recommended before any decision is
taken to become a Portuguese tax resident, and more so if
one wishes to take full advantage from the NHR status. RPBA
has an in-depth knowledge and expertise on this regime.
To obtain our professional fees or to book a consultation
please e-mail us (Marta Rêgo): marta.rego@rpba.pt
80
The Portuguese NHR Regime

General warning, disclaimer,
copyright and authorised use
▪ In the preparation of this presentation, every effort has been made to offer current, correct and clearly expressed
information. However, the said information is intended to afford general guidelines only. This presentation reflects
information current at 11 November 2022.
▪ This presentation is distributed with the understanding that RICARDO da PALMA BORGES & ASSOCIADOS,
SOCIEDADE DE ADVOGADOS, S.P., R.L. is not responsible for the result of any actions taken on the basis of
information herein included, nor for any errors or omissions contained herein.
▪ RICARDO da PALMA BORGES & ASSOCIADOS, SOCIEDADE DE ADVOGADOS, S.P., R.L. is not attempting through this
work to render legal or tax advice and the information in this presentation should be used as a research tool only,
and not in lieu of individual professional study with respect to client legal matters.
▪ Portuguese domestic legislation, foreign legislation, EU Directives and tax treaties have anti-abuse provisions, and
each client structure should be analysed taking those into account.
▪ RICARDO da PALMA BORGES & ASSOCIADOS, SOCIEDADE DE ADVOGADOS, S.P., R.L. is the copyright owner of this
presentation and hereby grants you a non-exclusive, non-transferable license to use this presentation provided
that you do not modify its content in any way, that you keep its proprietary notices of RICARDO da PALMA BORGES
& ASSOCIADOS, SOCIEDADE DE ADVOGADOS, S.P., R.L. and that you do not retain any copyright or other
proprietary notices displayed on such content.
81

Recent Tax Recognition
▪ Chambers & Partners – Ricardo Band 1 / RPBA Band 3 (2022 / 2021) | Ricardo Band 2 / RPBA Band 3 (2020 / 2019 / 2018 / 2017 / 2016) | Ricardo Band 1 / RPBA
Band 3 (2015 / 2014 / 2013) | Ricardo highlighted in Band 1 in the Private Wealth Law practice area of the High Net Worth (HNW) guide (2021 / 2020 / 2019 /
2018)
▪ Legal 500 – Ricardo, Ana Isabel and Rita are Recommended Lawyers / RPBA Band 2 (2022 / 2021 / 2020 / 2019 / 2018) | RPBA Band 3 (2017 / 2016 / 2015 / 2014
/ 2013)
▪ Best Lawyers – Ricardo recognised as "Tax Law Lawyer of the Year” (2017) and ranked under the "Tax Law" practice area and the "Tax Planning" subspecialty
(2022 / 2021 / 2020 / 2029 / 2018 / 2017 / 2016 / 2015 / 2014 / 2013 / 2012 / 2011) | Ana Isabel Correia recognised as "Tax Law Lawyer of the Year” (2020) and
ranked under the "Tax Law" practice area (2022 / 2021 / 2020 /2019) / RPBA Tax Law Firm of the Year in Portugal (2020)
▪ Who’s Who Legal – Ricardo ranked as a top lawyer in the Corporate Tax Lawyers directory (2021 / 2020 / 2019 / 2018 / 2017 / 2016 / 2013) / Ricardo recognised
as a top lawyer in the Private Client practice area (2020 / 2019 / 2018 / 2017)
▪ International Tax Review – Ana Rita Pereira included in the Women in Tax Leaders guide (2021 / 2020 / 2019 / 2018 / 2017)
▪ ITR World Tax – Ricardo, Ana Isabel Correia and Ana Rita included in the Tax Controversy Leaders guide (2022 / 2021 / 2020 / 2019 / 2018 / 2017) | RPBA Tier 2
(2021 / 2020 / 2019 / 2018) | RPBA Tier 3 (2017 / 2016 / 2015 / 2014) | RPBA Tier 4 (2013 / 2012 / 2011)
▪ ITR World Transfer Pricing – Ricardo mentioned / RPBA Tier 3 (2022 / 2021 / 2020 / 2019 / 2018 / 2017 / 2016 / 2015 / 2014)
▪ Leaders League – RPBA and Ricardo mentioned as “Excellent” under the "Corporate Tax" practice area (2022 / 2021)
▪ Corporate LiveWire – Ricardo da Palma Borges chosen as the winner of the Finance Award for Tax Lawyer of the Year – Portugal (2017) / Ricardo da Palma
Borges chosen as the winner of the Finance Award for Excellence in Tax Planning – Portugal (2016)
▪ Global Law Experts - RPBA Boutique Tax Law Firm of the Year in Portugal (2017 / 2015) / RPBA Tax Law Firm of the Year in Portugal (2016)
▪ Expert Guides – Ricardo ranked as a top lawyer in the Tax Lawyers directory (2022 / 2021 / 2020 / 2019 / 2018 / 2017 / 2016)
▪ Corporate Intl Magazine Global Award – RPBA Tax Law Firm of the Year – Portugal (2018 / 2017 / 2016 / 2014)
▪ Corporate Intl Magazine Legal Award – RPBA Boutique Tax Law Firm of the Year – Portugal (2015)
▪ Acquisition International Tax Award – RPBA Tax Law Boutique Firm of the Year – Portugal (2015)
▪ Acquisition International Legal Award – RPBA Boutique Law Firm of the Year – Portugal (2014)
▪ Tax Directors Handbook – Ricardo mentioned / RPBA Tier 3 (2015) and Tier 4 (2014)
82

(+351) 212 402 743
geral@rpba.pt
www.rpba.pt
www.linkedin.com/company/rpba
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