Portimmo | Home
  English      Vlaams      Nederlands      Deutsch      Français      Português


Pension in Portugal Home/Pension in Portugal/Tax Advantages

Tax Advantages

Tax regime for non-habitual residents

Competitive Benefits:

  • Taxes linked to the IRS on personal income made in Portugal are at a 20% fixed for a 10-year period of time.
  • There are no double taxes on self-employment, employment or pension income derived abroad.

How can a person gain status as a non-habitual resident?

  • Not being a Portugal resident for the past 5 years;
  • Go to a local tax office and register as a Portugal tax resident. For this to be possible, you have to stay in Portugal for 183 non-consecutive or consecutive days. If less time has passed, you must have a home by December 31st of that year that has been fully lived in as a residence.
  • Request your non-habitual resident status during registration for a Portugal tax resident or at least by March 31st of the following year after becoming a Portugal tax resident.

What is the rate of taxation and how is it applied to domestically obtained income, after the status for non-habitual resident has been granted?

The applicable rate of taxation is 20% for both self-employment and employment cases. However, in 2013 there was also a 3.5% surcharge.

This taxation covers income made through highly skilled fields such as the following scientific, technical or artistic fields:

  • Engineers, architects and related fields
  • Auditors
  • Actors, musicians and fine artists
  • Technicians, liberal professions and other related fields
  • Psychiatrists, dentists and doctors
  • Teachers
  • Directors, managers and investors when connected to companies that are covered by certain rules written in the Investment Tax Code
  • Senior managers

Non-habitual resident registration grants you the right of being taxed over a 10-year period after becoming a portugal tax resident.

After the status of non-habitual resident has been granted, when is earned foreign income exempt in Portugal from being taxed for non-habitual residents?

Read the following information, as this pertains to retired people and pensioners:

  • The source state taxes the income under an agreement between the state and Portugal to eliminate double taxations.

 

New Golden Visa Rules in Portugal?

A revision of rules for the golden visa in Portugal has left many potential applicants confused as to the rules and a great deal of misleading literature posted on the web suggesting the Portuguese golden visa limit has been reduced, but is not, this reduction may causes some delays and more work to do.

The qualifying real estate investment level for the golden visa in Portugal is €500,000. Earlier this summer the Portuguese government introduced a new investment level of €350,000 for certain categories of real estate.

The law states the following: “Acquisition of immovable assets, the construction of which has been completed, at least, 30 years ago or located in an area of urban regeneration and execution of refurbishment works in the acquired immovable assets…equal to or above 350 thousand euros;”

The point here is that even though this new option applies, it only applies to property that is over 30 years old or located in an urban regeneration area. It involves the execution of refurbishment works. This is an important aspect.

To qualify for the golden visa under such an investment requires the necessary:

  • permissions for renovation work on the building
  • permissions and payments to contractors all need to be done legally and of course within the tax structure so the necessary paperwork, proofs and payments are fully in order.
  • To undertake such a project would mean employing project managers and the necessary architects.
  • The applicant would have to have all the licences in place prior to any application being submitted which will of course delay any application for the visa. To mitigate any risk it is vital to ensure that any such property would qualify within this category.

Clients would need to ensure they build sufficient time into their schedule to take care of all these additional aspects.

Clients visiting to invest €500,000 in a location such as Lisbon can usually complete the necessary tasks within a few days, accompanied by ourselves and our lawyers in a methodical, established and time proven manner.

The alternative investment of €350,000 will require far more time and hands on management. Golden Visa applicants should be wary of companies offering such management for a fee and in particular remain conscious of the scope for overpaying for assets requiring reconstruction without the necessary independent professional advice from architects and surveyors.

For any international client not residing in Portugal and trying to manage from a distance it can be problematic, time consuming and expensive.

The €350,000 is reduced by a further 20% to €280,000 for renovation in low density, less developed areas of the country. This naturally does not apply to the cities or the more populated coastal regions creating issues for any future rental income potential.