Portugal is a popular destination for expats looking to retire or invest in property. One of the main benefits of living in Portugal is the Non-Habitual Resident (NHR) program, which offers favorable tax policies for individuals who become tax residents in Portugal. In this guide, we will provide a step-by-step guide on how to apply for NHR Portugal.
Understand the benefits of the NHR program
Before applying for the NHR program, it’s important to understand the benefits it offers. The NHR program provides tax exemptions for ten years on certain types of income, including foreign pension income, foreign dividend income, and foreign rental income. In addition, certain professions, such as engineers, IT professionals, and doctors, are subject to a reduced tax rate of 20%.
Determine your eligibility for the NHR program
To be eligible for the NHR program, you must:
- Be a non-Portuguese tax resident for at least five consecutive years
- Become a tax resident in Portugal after January 1, 2020
- Not have been a tax resident in Portugal in the previous five years
- Not be eligible for the Portuguese tax regime for non-regular residents
- Gather the necessary documentation
- To apply for the NHR program, you will need to provide the following documentation:
- Proof of residency in Portugal, such as a rental agreement or property deed
- Proof of income, such as tax returns or pay stubs
- Copy of your passport
- Proof of tax residency in another country
Apply for NHR through the tax authorities
To apply for NHR, you will need to complete Form 14741 and submit it to the tax authorities. You can submit the form electronically through the Portuguese Tax Authority’s website or in person at a local tax office.
Wait for approval
Once you submit your application, the tax authorities will review it and issue a decision within 90 days. If your application is approved, you will be granted NHR status and can begin taking advantage of the program’s tax benefits.
Monitor your NHR status
After you have been granted NHR status, it’s important to monitor your status and ensure that you continue to meet the program’s requirements. For example, you must remain a tax resident in Portugal and not become a tax resident in another country during the ten-year period of tax exemption.
The Non-Habitual Resident program is a valuable incentive for expats looking to relocate to Portugal. By understanding the eligibility requirements, gathering the necessary documentation, and applying through the tax authorities, you can take advantage of the program’s favorable tax policies. With proper planning and guidance, the NHR program can provide significant financial benefits for individuals and families who make the move to Portugal.