Non-Habitual Resident status

Non-Habitual Resident status: What you need to know

In 2009 the Portuguese government introduced a special tax regime to attract investors, retirees and professionals from high value-added sectors. This regime concerns persons not resident in Portugal, taxed in their country of residence: the non-habitual resident regime, better known as RNH status.

1. What is the RNH status

First of all, let's quickly explain what this NRH - Non-Habitual Resident - status means.

The RNH tax regime is a reduction or total exemption from income tax for 10 years. It is intended for pensioners whose European country has signed agreements with Portugal.

But not only that, since workers whoseactivity is considered to have a high added value can also apply for it:

112 - Diretor-geral e gestor executivo, de empresas

12 - Diretores de serviços administrativos e comerciais

13 - Diretores de produção e de serviços especializados

14 - Diretores de hotelaria, restauração, comércio e de outros serviços

21 - Especialistas das ciências físicas, matemáticas, engenharias e técnicas afins

221 - Medicos

2261 - Médicos dentistas e estomatologistas

231 - Professor dos ensinos universitário e superior

25 - Especialistas em tecnologias de informação e comunicação (TIC)

264 - Autores, jornalistas e linguistas

265 - Artistas criativos e das artes do espetáculo

31 - Técnicos e profissões das ciências e engenharia, de nível intermédio

35 - Técnicos das tecnologias de informação e comunicação

61 - Agricultores e trabalhadores qualificados da agricultura e produção animal, orientados para o mercado

62 - Trabalhadores qualificados da floresta, pesca e caça, orientados para o mercado

As regards France, the government has signed a tax treaty with Portugal. You must therefore be taxed in France to benefit from this exemption. However, it should be noted that civil service pensioners are not eligible for NHI status

2. What are the steps involved?

First of all, you have to apply resident in Portugal at the fiscal level.

The following conditions must be met in order to make this application:

• Firstly, not to have been a tax resident in Portugal for the previous 5 years;
• and, reside in Portugal for more than 183 days (consecutive or not) in the year of application for non-habitual residence status;
• If the 183-day condition is not met, you must have a home in Portugal. The purchase of a property is not compulsory. Renting is also allowed. The only condition is that you must prove that you intend to keep the property as your habitual residence.

Once you have registered as a tax resident and obtained your TIN (Tax Identification Number, "contribuinte") from the Portuguese Tax Office, you must apply for Non-Habitual Resident status:

• The first step is to apply to the Portuguese tax authorities. This must be done by 31 March of the year following the move to Portugal.
• Once submitted to the "portal das finanças", the file is analysed by the Portuguese authorities (and no, it is not an automatic right, it is subject to analysis and approval). The processing of the application for RNH status is usually relatively quick.
• The RNH status has a non-renewable duration of 10 years.

3. What are the benefits?

• Beneficiaries of NHI status receiving income from a high value-added activity in Portugal, whether employed or self-employed, benefit from a 20% flat rate tax.
• Private pensions benefit from a total exemption tax for pensioners living in Portugal before 31 March 2020while pensioners from 1 April 2020 onwards have a tax rate of 10%.

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