In 2009 Portugal introduced a beneficial voluntary Personal Income Tax (PIT) regime for non habitual residents aiming to attract talent in high value added activities and HNWI’s and their families to Portugal.

 

This regime aims to attract to Portugal non resident professionals qualified for activities with high added value intellectual or industrial propriety or knowhow, as well as beneficiaries of pension schemes granted abroad.

 

Decree-Law nu. 249/2009, entered in force on the 1st January 2009.
 

In order to benefit from this regime, individuals must comply with the following three requirements:

 

1. The individual was not considered tax resident in Portugal in the previous 5 years;

2. To be considered as a tax resident, the individual should remain for more than 183 days in Portugal during the relevant fiscal year; or, have a place of abode in Portugal at 31 December of that year with the intention to hold it as his or her habitual residence.

3. The individual will be required to register with the Portuguese tax authorities as a NHR on the year it becomes as a resident taxpayer (or up to 31 March of the following year according to a Draft Law);

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Advantages

 

• The status is granted for a period of 10 consecutive years, it’s not extendable;

• Non habitual residents will be subject to a reduced 20% PIT rate both on salaries and business and professional income of a Portuguese source arising from high added value activities of a scientific, artistic or technical nature, listed below.

• Non habitual residents will be exempt from PIT on salaries (employment income) of a non Portuguese source if such salaries were subject to tax in the country of source under an existing Double Tax Treaty or, if no Tax Treaty exists, were subject to tax in another jurisdiction and are not considered as Portuguese source income under domestic rules;

• Business and professional income of a non Portuguese source relating to high added value services of a scientific, artistic or technical nature, as well as from intellectual or industrial property or industrial, commercial or scientific information, earned by non habitual residents abroad are exempt from PIT provided such fees could have been taxed under an existing Double Tax Treaty or could have been taxed in another non black listed jurisdiction in accordance with the provisions of the OECD.

• Rental income, investment income and capital gains of a non Portuguese source obtained by non habitual residents are also PIT exempt, provided the below mentioned conditions are met.

• Pensions paid abroad to non habitual residents are also PIT exempt if such pensions were subject to tax under an existing Double Tax Treaty or if the pension should not be considered as obtained in Portugal and related contributions did not allow a PIT deduction in Portugal.

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This regime allows other types of income to be tax exempt in Portugal if:

 

• It may be taxed in the country of source in accordance with the applicable tax treaty; and

• The income is not sourced from a tax haven as set in the Portuguese “black list” approved by Ministerial Order no. 150/2004, amended by no. 292/2011.

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Table of Activities considered of High Added Value

 

1 - Architects, engineers and similar:

101 - Architects

102 - Engineers

103 - Geologists

2 - Visual artists, actors and musicians:

201 - Theater, ballet, cinema, radio and television artists

202 - Singers

203 - Sculptors

204 - Musicians

205 - Painters

3 - Auditors:

301 - Auditors

302 – Tax Consultants

4 - Doctors and dentists:

401 - Dentists

402 - Medical Analysts

403 - Clinical Surgeons

404 - Ship’s doctor

405 - General Practitioners

406 - Dentists

407 - Clinical dentists

408 - Medical physiatrists

409 - Gastroenterologists

410 - Ophthalmologists

411 – Orthopedic Surgeon

412 - ENT(Ear Nose and Throat) specialists

413 -Pediatricians

414 - Radiologists

415 - Doctors from other specialties

5 - Teachers:

501 - Professors

6 - Psychologists:

601 - Psychologists

7 - Liberal Professionals, technicians and alike:

701 - Archaeologists

702 - Biologists and life sciences experts

703 - Computer Programmers

704 - Software consultant and activities related to information technology and computing

705 – Computer programming activities

706 - Computer consultancy activities

707 - Management and operation of computer equipment

708 – Data services

709 - Data processing, hosting and related activities; Web portals

710 - Data processing, hosting and related activities

711 - Other data service activities

712 – News agencies

713 - Other information service activities

714 - Scientific research and development

715 - Research and experimental development on natural sciences and engineering

716 - Research and development in biotechnology

717 - Designers

8 - Investors, Managers and Directors:

801 - Investors, Directors and managers of companies that promote productiveinvestment, as long as they are connected to projects and concession contracts that are eligible for tax benefits per the Investment Tax Code

802 - Upper Management

 

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