Tax Benefits for Foreigners and Retirees
Fiscal Benefits
Since 2013, Portugal established the NPR, a new tax framework that created very significant tax benefits for foreigners and non-residents. The advantages are enormous, especially for retired foreigners who establish their fiscal residence in Portugal, enjoying a beautiful country and a very attractive lifestyle.
The NPR (non-permanent resident) benefits from a very attractive tax regime valid for 10 consecutive years.
- Full tax exemption for pensions obtained outside Portugal;
- Tax exemption for other foreign revenues, noting, however, that these revenues may be taxed in the source country based on applicable international tax conventions.
- 20% tax (flat rate) on employment income obtained in Portugal in “high value-added professional activities”. They are architects, engineers, auditors, musicians, doctors, dentists, teachers, researchers, advisors, and managers, among others.
NPR holders will also benefit from the full estate tax exemption to spouse, direct descendants or ascendants.
The following requirements must be met:
- Not have been a tax resident in Portugal in the last five consecutive years;
- Registration in Portugal as a tax resident under the NPR Program
- For employment income earned in Portugal, “high value-added professional activity” is required under the NPR Rules. They are architects, engineers, auditors, musicians, doctors, dentists, teachers, researchers, advisors, and managers, among others.
What are the main requirements to qualify for the NPR tax regime?
What are the main requirements to qualify for the NPR tax regime?
The following requirements must be met:
- Not have been a tax resident in Portugal in the last five consecutive years;
- Registration in Portugal as a tax resident under the NPR Program
- For employment income earned in Portugal, “high value added professional activity” is required under the NPR Rules. They are architects, engineers, auditors, musicians, doctors, dentists, teachers, researchers, advisors, and managers, among others.
What is the inheritance tax policy in Portugal?
There is total exemption from gift or inheritance taxes for spouses, direct descendants, or ascendants.
A fixed stamp duty of 10% is applicable to gifts to other persons not included in the above.