Portugal's tax system for expatriates has garnered significant attention in recent years, owing to its potentially advantageous provisions for foreign residents. The Non-Habitual Resident (NHR) regime, introduced in 2009, offers substantial tax benefits to eligible expatriates for a period of ten years. Under this scheme, certain types of foreign-sourced income may be exempt from taxation in Portugal, whilst income earned within the country may be subject to a flat rate of 20% for specific professions.
It is crucial for expatriates to understand that eligibility for the NHR status requires meeting specific criteria, including not having been a tax resident in Portugal for the five years prior to application. Furthermore, individuals must ensure they comply with Portuguese residency requirements to maintain their NHR status.
Whilst the NHR regime can offer significant tax advantages, it is important to note that Portugal's tax system is complex and subject to change. Expatriates are strongly advised to seek professional guidance from tax specialists well-versed in both Portuguese and international tax law to ensure full compliance and to optimise their tax position in accordance with current regulations.