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2020 brings new changes to the NHR - Non-Habitual Residents tax regime

The Portuguese Government will apply a fixed tax rate of 10% for all pensioners who apply for the NHR status

In the beginning of 2020, the Portuguese Government decided to change the NHR - Non-Habitual Residents tax regime, following pressure from other European countries whose pensioners where moving to Portugal to benefit from the country’s IRS (Personal Income Tax) exemption.

Because of the changes approved in the Portuguese Parliament, instead of there being a total IRS exemption for all those who benefit from the NRH tax regime, retirees who move to Portugal and apply for the this special tax scheme will now be taxed at a fixed rate of 10% on pensions paid by their country of origin, regardless of their income.


The 10% tax rate will apply to new members of the NRH regime. Those who are already Non-Habitual Residents and are benefitting from the scheme, will continue to have the 0% tax exemption until the end of their ten-year tax period.


The current beneficiaries may also, if they wish, adhere to the more recent NRH rules if it is to their advantage. For example, in situations where their country of origin has the power to tax them, as is the case in Finland.

If you’d like to know more about the NHR - Non-Habitual Residents tax regime or find out how to benefit from other tax benefits the Portuguese Government offers foreigners living in Portugal, our team of experienced Chartered Accounts will be happy to help you. Please contact us for more information.


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