The Non-Habitual Residency (NHR) is an attractive scheme in Portugal that allows those who qualify to benefit from a decade of generous tax breaks. One of the attractions of NHR is that (most) income from foreign sources is exempt from Portuguese taxation for ten consecutive years. This means that you could potentially receive rental income, capital gains on real estate, dividends and non-Portuguese employment income exempt of taxation in Portugal and a possible double exemption, both in Portugal as well as the country where the income is paid. Does it sound too good to be true?
You may have considered moving to Portugal for a lifestyle change; excellent climate, great food and a lower cost of living. Besides a better quality of life did you know that Portugal also offers a very attractive regime to newly resident individuals?
What about pension income? If you are in receipt of pension income from a foreign source, it will be exempt from Portuguese income tax, if the pensions are subject to tax under an existing double tax treaty or if the pension income is not considered as obtained in Portugal and the contributions to the scheme did not give rise to a tax deduction. Since most double tax treaties give exclusive taxation rights to the country of residence in effect your pension income could theoretically end up being tax exempt.
The Non-Habitual Residence regime also allows for the accrual of wealth in a tax friendly environment save for blacklisted tax havens and to dispose of assets with tax exemptions as well as to transfer wealth to the next generation without being subject to either inheritance or gift tax.
Speak directly to an expert in non-habitual residency about how to get residency in Portugal under the NHR status. To take full advantage of the current opportunities it would be sensible to receive professional advice from cross border specialists.
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