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Transitory NHR tax regime

The Portuguese government has announced the launch of a "Transitory NHR tax regime" for non-habitual residents in 2024.


"This is a transitional regime that makes it possible to safeguard the legitimate expectations of individuals who have already made the decision to immigrate or return to Portugal," explains António Costa, in the explanatory note that accompanies the proposed amendment to the State Budget (SB) initiative for 2024.


The "Transitory NHR tax regime" maintains the possibility for citizens to access the special tax regime as long as they have already taken a series of steps related to changing their tax residence. In practice, in addition to the current benefits of this tax regime, in which the individual income tax rate is more attractive during the first ten years, being maintained for those who become tax resident by the end of 2023 (which was already safeguarded in the initial version of the SB), the current government is proposing that the regime will also apply to those who "become resident for tax purposes by 31 December 2024" and "declare, for the purposes of their registration as a non-habitual resident, that they have a" certain element that binds them to this commitment. There are six ways to become eligible for this transitional regime:

  • Promise of employment or employment contract, or promise or secondment agreement concluded by 31 December 2023, and your work duties must be carried out in national territory;
  • Lease agreement or other agreement granting the use or possession of property in Portuguese territory signed by 10 October 2023;
  • Reservation contract or promissory contract for the acquisition of a right in rem over real estate in Portuguese territory signed by 10 October 2023;
  • Enrolment or registration of dependents in an educational establishment located in Portuguese territory, carried out until 10 October 2023;
  • Residence visa or residence permit valid until 31 December 2023;
  • Process initiated with the authorities responsible for granting a residence visa or residence permit, until 31 December 2023.


The decision to create a transitional regime comes at a time when it is already known that there will be legislative elections, which will result in a new government, the composition of which may dictate whether there will continue to be alternatives in Portugal similar to the current NHR, in which tax benefits are one of our country's many attributes for foreign investors.


Source: https://www.publico.pt/2023/11/15/economia/noticia/ps-recua-lanca-regime-transitorio-residentes-nao-habituais-2024-2070312




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