As an Italian citizen, can I apply for the NHR but spend only two months a year in Portugal? I would like to solve my taxes there but then travel around the globe as a digital nomad. Is this possible?
Application to NHR is dependent on presenting a Portuguese address proof. The NHR status is not connected with minimum staying periods as the holder of this status is already declaring that Portuguese become his tax residency country. Notwithstanding, conflict of jurisdictions can exist if the holder fulfills the tax residency requirements in any other country - for instance, by spending there more than 183 days / year.
To apply for NHR in Portugal, you must ensure that you are registered as a resident in Portugal, at a tax office or at any Loja do Cidadão service. Once you have registered as a taxpayer, you can then apply for non-housing resident status. This request must be made by March 31 of the year following the year in which you became a resident in Portugal. In order to be able to apply for the status, you must make a request addressed to the director of registration services, which can be delivered to any Finance service. Please note that to be considered resident in Portugal, according to article 16, no. 1 of the IRS Code, you must stay more than 183 days in Portuguese territory, consecutive or interpolated, in any period of 12 months, starting or ending in the year in question or, alternatively, if you stay for less time, you must own a property that you intend to keep and use as your own permanent residence. You may stay only two months per year in Portugal, provided that you spend more than 183 days in Portuguese territory, and you may do so interpolately, in any 12-month period, starting or ending in the year in question. In order to be able to travel the world as a digital nomad, the double taxation conventions between Portugal and several countries contain a criterion to determine, in these cases, which country will be considered the State of Residence. The first tie-breaker criterion of the OCDE model convention is based on the existence of housing. If you own a house in another country and you leave your place of residence in Portugal, you will be considered resident in that country and if so, Portugal will no longer tax you as a resident and the other country will be entitled to tax you on your worldwide income (including income from work in Portugal). If you maintain two residences, you will be considered resident in the country with which your personal and economic relations are closer (center of vital interests). For example, if you spend most of the year working in Portugal, this is your country of residence. In turn, if you work longer in a foreign country, that will be your tax residence.
NHR (Non-Habitual Residence) is a special taxation regime that is available under certain eligibility criteria to expats that recently moved to Portugal. This status grants certain tax exemptions and privileges over a 10-year period. EU and non-EU nationals can become NHR (special tax regime to attract to move to Portugal). Non-habitual resident status can be requested by anyone who meets three requirements. You must live abroad, not have been a resident in Portugal within the last five years and want to move to Portugal. To be considered a resident, you must remain in Portugal for 183 days a year or have your primary home there.
To qualify and keep the NHR status, you need to be deemed as a tax resident in Portugal. The conditions involve either staying in Portugal more than 183 days or have in Portugal your place of abode. It is highly recommended to understand the periods of time you will spend in different countries, the countries where you will have houses available, etc., to avoid tax residency conflicts and guarantee your NHR will remain applicable.
To apply for the NHR tax regime, you'll first need to obtain your Certificate of Residence for EU Citizens - which will come with the condition of a minimum stay requirement in the country, inconsistent with staying only 2 months/year in Portugal.
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