IAS is thrilled to share with you an important update regarding Portugal's Non-Habitual Resident (NHR) tax regime. Following the last news related to the end of the NHR from January 1, 2024, and the creation of a transition period, we now would like to inform you that the Tax Authorities had issued a clarification regarding the transitory regime.

Saying so, we would like to tell you that according to Article 236 of the LOE 2024, the NHR tax regime, as previously in force, will continue to apply until the end of the 10th consecutive year from the year of registration as an NHR. This provision applies to individuals who:

a) Were already registered as NHRs with the Tax Authority (AT) as of January 1, 2024, until the completion of their 10-year entitlement to be taxed as NHRs.

b) Meet the conditions outlined in Article 16 of the Personal Income Tax Code (CIRS) for qualification as tax residents in Portugal as of December 31, 2023, and apply for NHR registration with effects from the year 2023 by March 31, 2024.

c) Become tax residents by December 31, 2024, and subsequently apply for NHR registration with effects from the year 2024 by March 31, 2025, declaring their eligibility as NHRs.

To qualify, individuals must fulfill one of the following criteria:

1) Have a promise or employment contract with duties in Portugal by December 31, 2023;
2) Hold a lease or other property agreement in Portugal by October 10, 2023.
3) Have a reservation contract for property in Portugal by October 10, 2023.
4) Enroll dependents in Portuguese educational institutions by October 10, 2023.
5) Possess a valid residence visa or permit until December 31, 2023.
6) Initiate residence visa or permit procedures by December 31, 2023.

To demonstrate eligibility, taxpayers must provide supporting documents when requested by AT services.

d) Be family members of taxpayers mentioned in paragraphs a), b), or c) of Article 236(3) of the LOE 2024.

For applications submitted after March 31, 2025, NHR status will be effective from the year of application until the end of the 10th consecutive year from 2024, the year of residency in Portugal.

It's important to note that individuals must hold professions of high added value as specified in administrative rule n.º 12/2010, dated January 7th, to access this regime.

We believe this information will assist you in understanding the recent changes to the NHR tax regime. 

Should you have any questions or need assistance with the application, please don't hesitate to contact the IAS TEAM.