NHR Status guidance

Non Habitual Resident Status – What is it about?

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What is Non Habitual Resident status?

Non-Habitual Resident (NHR for short) is a fiscal status that you can apply for and obtain when you move your residence to Portugal. This can be through the European Union Residence Certificate (CRUE) or through a visa applicable to third countries (i.e. D7 visa).

NHR status is applicable to highly qualified non-resident professionals and people that are getting pensions from third countries. This last condition is why Portugal has become so popular with pensioners from countries all over the world.

The benefits of the NHR status are effectively lower tax charges on your income. Although there used to be a 0% rate on pension income, this is now 10%. This tax rate will be applicable for 10 years. The rate for income on individuals coming under the “high value added professions” remains at 20%.

This is still an incredibly competitive rate compared with the normal Portuguese tax regime or indeed other countries. This is specially true when you account that as resident you have access to all the same services as any Portuguese citizen, such as the heavily subsidized healthcare system.

You will need to double check if there is an agreement for double taxation. This is so you don’t end up paying taxes on your income, in both countries. For example, Portugal and UK have an agreement to avoid double taxation. In this instance, if you become a Portuguese resident and transfer your pension payments to Portugal, you will only need to pay tax in Portugal. Under the NHR status, this would be 10% for 10 years.

But always get advice from a competent accountant to understand what is applicable to your unique situation. You must understand the implications of changing your tax residence to a different country.

Who can apply for Non Habitual Resident status?

  • Any person that requests the NHR status must have obtained resident status in the same year the request is made.
  • Must have not been a resident in any of the previous five years the request is being made.

When should you request Non Habitual Resident status?

  • You can only do this after you are registered as resident in Portugal.
  • The deadline to register as NHR is 31st of March of the following year, after you became a Portuguese resident.

How to register

  • You can do it online, on the Portuguese Tax Office website (Portal das Finanças), or
  • On paper, in any Portuguese Tax Office.

How to register online?

Go to Portal das Finanças here, and register on the website. Fill in the registration form and an access password will be sent to you to your registered address.

Once you receive your password, you need to log on to the website and request NHR status. You need to complete the necessary form, that you can find by the following options on the left hand side menu:

Serviços Relacionados > Serviços > Dados Pessoais > Residente Não Habitual

The menus on the website change frequently. So, we’re giving you what is currently the link to access the registration form, but this can change at any time –  CLICK HERE. Once you are logged in, if you click or copy and paste this link, it should give you direct access to the page. There you need to click on “Entregar pedido”. At this stage, the page seems to be only available in Portuguese. So you might need to ask help from a Portuguese friend with the completion of the form.

The official Tax Office guidance form is available in English on this link. This was last updated in June 2020, and this article is based on this guidance.

Can I follow up the status of my application?

Yes, you can. In the same link where you submitted your request, as above. There’s a button called “Consultar pedidos”, where you can check this. In the same way, if you need to amend the request, there’s a button to “Alterar Pedido”.

What if my registration is suspended?

This is usually because although you might be living in Portugal, you have not registered as resident. In this case you must register as resident in Portugal and provide evidence within 20 days of the suspension, at a local Tax Office.

After this your request will either be accepted or rejected.

What if my request is rejected?

If by any chance your request for NHR status is rejected, you will be informed. You can appeal this decision and will need to provide the reasons and any supporting documentation.

Communication methods

The Portuguese Tax Office website uses both email and text messages (Portuguese mobile numbers only) for communicating with you. But for this you must validate both these communication methods on their website. So, once you registered and are able to log in, make sure you do this.

You can get in touch with the Portuguese Tax Office via:

  • telephone, on (+351) 217 206 707, Monday to Friday (except Bank holidays), 9am to 7pm
  • e-balcão facility on their website
  • by appointment at any local Tax Office

 

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Comments

  1. Reply paul

    Hi I am looking to buy a property in Portugal, this would be my sole property but I would be working in the UK for 6 months of the year, what are my options in regards to which visa I would need, and how long per year would I be able to stay in Portugal? TIA

    • Ricardo

      Hi Paul. In your case you might not need a visa. You can stay in Portugal 90 days of every 180 days (with a maximum of 183 days per year), visa free. If you stay any longer, then you will need a visa and change your fiscal residency to Portugal. Depending on your line of work and employer, you might not be able to keep working in the UK and getting paid in Portugal. I suggest if you want to go down this route, to speak with a lawyer on the best type of visa to apply for and with a specialist accountant for tax issues. We recommend Blevins Franks for tax issues, they have offices in UK and Portugal. Their contact is on our business directory. And for buying a house, that’s what we are here for. Just let us know.

  2. Reply Joanna

    Hi, if I have a D7 visa and apply for NHR do I pay tax in the UK and none in Portugal?
    I am employed permanently with a UK company but will be applying for a D7 visa to work remotely from Portugal.

    • Ricardo

      First, if you are working for a company in the UK and intend to live in Portugal permanently, you very likely need to change your tax residence to Portugal and your company would have to pay your salary to a Portuguese account, which might be an issue for them. Second, D7 visa is for people with passive income, not salaried. Third, NHR is only applicable in certain situations – certain high value professions, where tax rate comes down to 20% and pensioners, where tax rate is 10%.These rates are applicable for 10 years. Currently there is no such thing as 0% rated income tax for people registering for NHR now. Portugal and UK have a double taxation agreement as well, so UK income should not be taxed. Seems to me that you might be trying to achieve something, but how you want to do it is not exactly correct. You will do well to get proper legal and financial advice. You can find Blevins Franks in our Business Directory, who will be able to advise you on tax matters.

  3. Reply Mr guy

    If you have a D7 visa please

  4. Reply Mr guy

    Hi
    If I get a D7 visa do I have to pay tax on my uk pension in Portugal or can I keep paying tax in the uk please ?

    • Ricardo

      I believe that is the case, if you are moving permanently to Portugal. You might need to look at how you register your tax status in Portugal, NHR might be an advantage. See this extract from KPMG accountants page: Under the new rules, net pension income received by individuals who have been granted NHR status, if the income is not deemed income from a Portuguese source, will now be subject to a flat 10-percent income tax rate. A tax credit will be available for the tax paid abroad, limited to the taxes due in Portugal for such income. Link. You’d be best to contact a specialized accountant to understand the implications for your particular situation and what is the best set up for you as we are not tax experts and are not qualified to give advice.

    • Mr guy

      Hi
      So if I get a D7 visa is it compulsory to register for NHR or is it just an option please?
      Thank you

    • Ricardo

      It is not compulsory, D7 visa is independent from NHR, which is a tax status. But the likelihood is that NHR status will be of advantage to you, from a tax point of view.

    • Mr guy

      Hi
      is it compulsory to register for NHR or is it just an option please?
      Thank you

    • George Baker

      Hi Ricardo
      Lets assume I qualify for a D7 visa with NHR status and am paying 25% tax on my foreign investment income, will the portuguese flat tax rate of 10% be credited under the local tax credit law?

    • Ricardo

      Hi George, under NHR, most income from a foreign source is exempt from Portuguese taxation for ten consecutive years, as is income that is taxable in another country. But the devil in in the detail, as always. You should always look for expert advice, and the more complex and more investments you have, then I say definitely get expert advice! There’s few things worse than being on the wrong side of the tax man. Blevins Franks might be able to assist you. Their contact is in our business directory.

  5. Reply MR FRANK MCGOWAN

    Is the 10% tax on all your pension income? Or is there a personal allowance that is tax free before you pay tax as in the UK?

    • Ricardo

      I believe that is the case. See this extract from KPMG accountants page: Under the new rules, net pension income received by individuals who have been granted NHR status, if the income is not deemed income from a Portuguese source, will now be subject to a flat 10-percent income tax rate. A tax credit will be available for the tax paid abroad, limited to the taxes due in Portugal for such income. Link. You’d be best to contact a specialized accountant to understand the implications of your particular situation and what is the best set up for you.

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