| Short Title: | Decree-Law n. 249/2009 |
| Legislature: | Government of Portugal |
| Long Title: | Tax Code for Investment |
| Territorial Extent: | Portugal |
| Date Enacted: | 16 July 2009 |
| Date Assented: | 11 September 2009 |
| Signed By: | Aníbal Cavaco Silva |
| Date Commenced: | 1 January 2009 |
| Administered By: | Ministry of Finance Portuguese Tax and Customs Authority |
| Amends: | 2020 Portuguese State Budget Law |
| Related Legislation: | Corporate Income Tax Code Personal Income Tax Code |
| Summary: | Creates the Investment Promotion Tax Code |
| Keywords: | Income Tax |
| Status: | in force |
The tax regime for non-habitual residents (commonly known as NHRs or NHR Tax Regime), formally known as non-regular residents, was created with the approval of the Investment Tax Code, approved by Decree-Law n. 249/2009, of 23 September. It changed the rules of the Portuguese Personal Income Tax, by granting a set of tax exemptions and flat rate taxation for a period of 10 years,[1] [2] in order to attract to Portugal, expat professionals qualified in activities with high added value or intellectual, industrial or know-how,[3] as well as pensioners and other passive income earners.[4]
Under the initial rules set in the NHR regime the following tax rates applied, in Portugal, to the income of those duly enrolled in it:[5]
| Pensions | Up to 48% | 0% | 10% | 10% | |
| Employment Income from High-Added Value Activities | 20% | 0% | 0% | 20% | |
| Employment Income | Up to 48% | 0% | 0% | 0% | |
| Business or Professional Income from High-Added Value Activities | 20% | 20% | 20% | 20% | |
| Business of Professional Income | Up to 48% | 0% | 0% | Up to 48% | |
| Intellectual or Industrial Property Income | 16,5% or 28% | 0% | 0% | 16,5% or 28% | |
| Capital Income | 28% | 0% | 0% | 35% | |
| Rental Income | 25% | 0% | 0% | 25% | |
| Capital Gains (Shares) | 28% | 0% | 0% | 28% | |
| Capital Gains (Real Estate) | 14,5% - 28% | 0% | 0% | 14,5% - 28% | |
| Trusts | 28% | 0% | 0% | 35% |
The above rules allowed for the double non-taxation on pensions, specially for those sourced in Scandinavian countries, such as Finland and Sweden, and in France. This situation lead to Finland and Sweden to revoke their taxation agreements with Portugal.[6] [7] [8] [9] [10]
With the approval of the 2020 State Budget Law, by the Assembly of the Republic, the Portuguese Government addressed the vocal critics of other EU-Member States by implementing changes to the regime, namely regarding pension income.[11]
| Architects | Directors-General or Executive Directors | |
| Engineers | Administrative Services or Commercial Directors | |
| Geologists | Specialized Services or Production Directors | |
| Theater, dance, cinema, radio and TV artists | ||
| Singers | ||
| Sculptors | ||
| Musicians | ||
| Paintors | ||
| Auditors | Intermediate science and engineering technicians and professions | |
| Tax consultants | Market-oriented farmers and skilled agricultural and livestock workers | |
| Dentists | ||
| Medical Doctors | ||
| University Professors | ||
| Psychologists | Skilled workers in industry, construction and craftsmen, including in particular skilled workers in metallurgy, metalworking, food processing, wood, clothing, crafts, printing, manufacturing precision instruments, jewelers, artisans, electricity workers and in electronics. | |
| Archeologists | Plant and machine operators and assembly workers, namely fixed plant and machine operators. Workers in the professional activities referred to above must have at least level 4 of qualification in the European Qualifications Framework or level 35 of the International Standard Classification of Education or have five years of duly proven professional experience. | |
| Biologists and Life Sciences experts | N/A | |
| IT Programmers and consultants | ||
| Managers and operators of computer equipment | Administrators and managers of companies promoting productive investment, provided they are assigned to eligible projects and with contracts for the granting of tax benefits entered into under the Investment Tax Code, approved by Decree-Law n. 162/2014, of October 31. | |
| Information service activities | Linguists | |
| Data processing activities, domiciliation of information and related activities and web pages | Journalists | |
| News agency activities | Authors | |
| Other information service activities | Hotel Directors | |
| Scientific R&D activities | Specialists in the fields of physics, mathematics, engineering and other related fields | |
| Research in physics and natural sciences | Restaurant Directors | |
| Research in biotechnology | Commerce related Directors | |
| Designers | Other Services Directors | |
| Company Directors (non-shareholders) | Skilled market-oriented forestry, fishing and hunting workers | |
| Investors and company directors as defined in Decree-Law n. 249/2009 of September 23. | N/A | |
Under the Investment Tax Code rules, the regime is available to anyone who fulfilling the following conditions:[15]
Upon application, the Portuguese Tax and Customs Authority might request proof of tax residency abroad, such as tax residency certificates, tax returns and tax settlement notices.
Among the 27.367 beneficiaries, according to 2019 numbers, just over two thousand (8%) develop professions with high-added value, while the remaining were expat pensioners. The most common nationalities among pensioners were French, Italian, and Swedish.[16] [17]
The NHR status,[18] while offering significant tax benefits, does have its limitations, such as: