Non-Habitual Residents Tax Regime

Why Portugal? Weather:

Portugal has been part of the European Union since Portugal is one of the EU´s most southern countries 1986, allowing for all residents to benefit under the with mild temperatures moderated by the Atlantic umbrella of EU rights, including the free movement Ocean. It is never too cold and never too hot. of people and capital within the EU. Taxation: Portugal is one of the safest countries in the world, ranking third in 2019. Since 2009, Portugal has implemented a special taxation regime known as the Non-Habitual Residents Tax Regime (or NHR). This regime is open to all nationalities who relocate their residence to Portugal.

Rua General Firmino Miguel nº3 Torre 2 - 10º B 1600-100 Lisboa Portugal Tel: +351 21 723 40 00 Fax: +351 21 723 40 29 [email protected]

www.slcm.pt Non-Habitual Residents Tax Regime

WHAT IS THE NHR TAX REGIME?

_The NHR regime is a tax regime applicable to _The mechanism was designed to exempt most _The NHR Tax Regime also makes allowance for individuals who become tax resident in Portugal. foreign NHR income from taxation, provided that special taxation for activities undertaken in Portugal The NHR regime includes tax exemptions and reduced some conditions are met, most notably in cases which are considered to be of high added value. rates of taxation at the level of personal income. where the source country is authorized to tax These high added value activities are subject to a according to the respective Double Tax Treaty (DTT). flat taxation of 20%.

WHO IS WHAT CONDITIONS WHAT FORMALITIES FOR HOW LONG CAN I BENEFIT ELIGIBLE? MUST BE MET? ARE REQUIRED? FROM THIS REGIME?

_Individuals, regardless of nationality. _Not being considered to be a tax _Submitting an on-line request to _For the following 10 years. resident in Portugal in the 5 years become a NHR, upon becoming a prior to application. Portuguese tax resident or up to the end of March of the following year. Non-Habitual Residents Tax Regime

FOREIGN INCOME TAXATION IN ORTUGAL

_Pension income1 _Subject to taxation at a rate of 10%.

_Passive income (including dividends, interest and _xempt, upon meeting certain conditions. royalties, among others)

_apital Gains related to real estate _xempt, upon meeting certain conditions.

_Other apital Gains _Subject to taxation at a rate of 2%.

_Self-employment income2 _xempt, upon meeting certain conditions and if the activity performed is considered to be of high added value.

_mployment income2 _ xempt, upon meeting certain conditions.

ORTUGUESE INCOME TAXATION IN ORTUGAL

_Self-employment income2 _Subject to taxation at a flat rate of 20%, if the activity performed is considered to be of high added value.

_mployment income2 _Subject to taxation at a flat rate of 20%, if the activity performed is considered to be of high added value.

1 The 10% reduced rate on pensions was introduced by the 2020 Portuguese State Budget Law. This flat tax rate is mandatory for non-habitual resident individuals who register as tax residents in Portugal as from the 1st of April 2020. 2 Please note that self-employment and employment income is subject to Social Security. This information does not constitute opinion or legal advice and does not exempt the consultation of proper legislation and / or advice from a professional for application to concrete situations. LIVING IN PORTUGAL.

Why SLCM?

SLCM Tax Team has extensive NHR experience (i) if you meet the requirements to become an NHR over more than 9 years. and (ii) if your income is eligible to fully benefit from the NHR regime. Our Tax Teams has successfully assisted high net worth individuals, entrepreneurs, Timely and accurate assessment of your expatriated workers, pensioners, among others conditions and your income is essential to reaping in the NHR procedure. the maximum benefit from the NHR tax regime and the experience of setting up in Portugal. It is not only important that the NHR status is requested in proper time but also to understand

Rua General Firmino Miguel nº3 Torre 2 - 10º B 1600-100 Lisboa Portugal Tel: +351 21 723 40 00 Fax: +351 21 723 40 29 [email protected]