By Moustafa Daly
In its state budget voting on Wednesday, the Portuguese Parliament voted to maintain but slightly restrict access to the Non-Habitual Resident (NHR) tax scheme in 2024 – however with plans to scrap it altogether after that.
The scheme gives foreigners and returning Portuguese expats preferential tax rates at a flat rate of 20% on locally generated income, and tax exemptions on income originated abroad. After the Parliament’s vote, eligible candidates can still apply to enjoy NHR benefits in 2024 given they have achieved a tax resident status in Portugal at the time of submitting, among other conditions.
“NHR will be available for applications during 2024, and golden visa applicants are included within the ones that will be in position to apply to NHR and benefit from the current regime for 10 years,” explains Sara Sousa Rebolo, lawyer and partner at Lisbon-based Prime Legal.
Beyond 2024, however, Portugal plans to introduce a more restricted version of NHR, limiting it to those in careers of higher education teachers, startups, and scientific research jobs recognized by local bodies as relevant to productive investment.
To qualify for NHR in 2024, candidates must have lived in Portugal for a total of 183 days per year. For those not meeting this condition, they must produce an employment or a housing contract.
Other qualifiable conditions include being crew members of ships or aircraft, and enrollment of dependents at a Portuguese educational establishment.
Launched in 2009, NHR is credited with attracting golden visa investors and digital nomads to the country. However, in October, now-resigned Prime Minister Antonio Costa vowed to scrap it in 2024, calling it unjust to locals who have to pay higher taxes.
The scheme has been decried as a culprit in the rise of housing prices in Portugal – the same motive that led Costa’s government to scrap the golden visa’s real estate option earlier this year.
Powered by Froala Editor
