The Non-Habitual Resident (NHR) tax regime in Portugal has been revoked by the 2024 State Budget. However, a transitional provision is established in Article 236, allowing taxpayers to obtain NHR status under specific conditions.
Conditions for Obtaining Non-Habitual Resident Status
- Taxpayers who, as of December 31, 2023, meet the conditions of Article 16 of the IRS Code to qualify as a resident for tax purposes in Portuguese territory.
- Taxpayers who become tax residents until December 31, 2024, and declare possession of one of the following:
- Work contract or promise, or detachment agreement signed until December 31, 2023, with functions to be performed in Portuguese territory.
- Rental contract or other contracts granting the use or possession of property in Portuguese territory signed until October 10, 2023.
- Reservation contract or promise of purchase for real estate rights in Portuguese territory signed until October 10, 2023.
- Enrollment of dependents in Portuguese educational institutions completed until October 10, 2023.
- Valid residence visa or residence permit until December 31, 2023.
- Residence visa or residence permit application process initiated until December 31, 2023, according to applicable immigration laws.
- Family members of the aforementioned taxpayers.
New Tax Incentive for Scientific Research and Innovation
Alongside the revocation of the NHR regime, the State Budget introduced Article 58-A to the Tax Benefits Statute, providing a new tax incentive for scientific research and innovation. This incentive applies to researchers and highly qualified workers who choose to reside in Portugal, become tax residents under Article 16 of the IRS Code, and have not been residents in Portugal in any of the five years prior. They must spend more than 183 days per year in the country and not have resided in Portugal in the previous five years.
According to Article 58-A, these residents will benefit from a 20% IRS tax rate on labor income (net income from categories A and B) for 10 consecutive years from their registration as a resident in Portugal.