Portugal remains among the leading European countries for migrants from all over the world, providing ideal conditions. The key advantage of the country is its loyal Non-Habitual Residence (NHR) tax system. Learn more about the tax regime for expats in Portugal in 2024

For many years, Portugal has been one of the leaders in Europe in terms of the number of expats, because the country is an ideal place for people who want to combine a career, a high quality of life and a warm, sunny climate. Another significant advantage is the favorable tax regime, and although many expat benefits were abolished in 2023, the updated Non-Habitual Residence (NHR) program continues to attract foreigners.

We talk about the peculiarities of the tax regime for expats in Portugal in 2024 in our article.

Why did expats like the old NHR system?

For the past 15 years, the NHR system has been available to all new Portuguese tax residents and provided a flat personal income tax rate of 20% for 10 years. It was incredibly beneficial to foreigners, especially those earning around €80,000 a year.

However, 2023 has become an important year in terms of changes to the tax system for new residents of Portugal. It has been announced that the preferential tax treatment for NHR residents will be abolished as Parliament has argued that it is no longer beneficial to the country.

That is why the new NHR program was launched in 2024.

Who is targeted by the NHR scheme in Portugal in 2024?

The updated NHR program from January 2024 targets three main categories of expats:

1. Professionals working in the field of research and innovation.

2. Highly qualified workers - engineers, IT specialists or those who work in the field of culture.

3. Employees of government-certified startups.

Tax amount under the NHR system in Portugal for 2024

The benefits remain unchanged - 20% single rate of personal income tax and exemption from taxation of other passive incomes.

Therefore, expats who belong to one of the above categories, in addition to the preferential rate, will also not pay tax on dividends, interest, royalties, capital gains, income from rental property outside Portugal and income from work in another country.

New personal income tax rates for expats in Portugal for 2024

If you are not an expat eligible for NHR in 2024, your income will be taxed at the general rates, the amount of which depends on the amount of income for the year:

- up to €7703 – 13.25%;

- from EUR 11,623 to EUR 16,472 - 23%;

- from EUR 16,472 to EUR 21,321 - 26%;

- from EUR 21,321 to EUR 27,146 - 32.75%;

- from EUR 27,146 to EUR 39,791 - 37%;

- from EUR 39,791 to EUR 51,997 - 43.5%;

- from EUR 51,997 to EUR 81,199 - 45%;

- over €81,199 – 48%.

Why do expats continue to go to Portugal?

Despite the change in the NHR program, Portugal continues to attract expats. All this is due to the fact that the country can boast of a high quality of life, a good healthcare index, a lively real estate market, as well as affordable prices and a mild climate.

How to move to Portugal in 2024?

Expats planning to move to Portugal in 2024 can choose one of the following visa options:

1. Golden visa - grants a residence permit to investors who will invest 200,000 euros or more in the Portuguese economy.

2. The D7 visa is aimed at retirees and foreigners who have a high level of passive income (approximately €2,424 per month for individuals and €3,639 for couples).

3. The D2 visa is a residence visa for professionals who have been invited to Portugal for a specific job, often on a temporary or fixed-term basis.

4. Self-employment visa – for those who wish to set up a business in Portugal, provided they have a business plan.

An approximate list of documents for moving to Portugal

Regardless of the type of visa you choose for moving, the approximate list of documents will be as follows:

- Valid passport: make sure it will be valid for at least three months after your planned move.

- Visa application form: fill it out online or at the Portuguese embassy or consulate.

- Passport size photos: two photos that meet the requirements of the Portuguese consulate.

- Confirmation of housing: reservation, rental agreement or letter from the owner.

- Confirmation of financial capabilities: bank account statements, employment contracts or confirmation of savings.

Moving to Portugal will be a wonderful chapter in your life, because even despite the changes in the taxation system for expats, the country still remains attractive to foreigners.

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Igor Usyk - Head of Legal Department at Visit World

For a safe move to Portugal, obtaining citizenship and employment, use the advice of an international lawyer.

We help to solve complex and simple issues for your comfort and safety in Portugal.

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