Portugal has emerged as a popular destination for expatriates and digital nomads, offering a welcoming environment and attractive tax incentives. To qualify for these tax breaks, individuals must meet specific eligibility criteria:
Eligibility Criteria
- Expatriates: Individuals who are not considered Portuguese residents for tax purposes. This typically requires spending less than 183 days in Portugal per year.
- Digital Nomads: Individuals who work remotely for companies outside of Portugal while residing in the country.
Types of Tax Breaks
Expatriates and digital nomads in Portugal can benefit from the following tax breaks:
- Non-Habitual Resident (NHR) Regime: This regime offers a 10-year tax exemption on foreign-sourced income, including employment income, pensions, and investment returns.
- Digital Nomad Visa (D7 Visa): This visa allows digital nomads to reside in Portugal for up to one year, with the possibility of renewal. It offers a reduced income tax rate of 20% on Portuguese-sourced income.
- Special Tax Regime for High-Value Professionals (RNH): This regime provides a flat tax rate of 20% on employment income for highly skilled professionals in certain industries, such as science, technology, and culture.
Application Process
To apply for these tax breaks, individuals must follow the following steps:
- NHR Regime: Submit an application to the Portuguese Tax Authority (AT) within four months of becoming a non-habitual resident.
- D7 Visa: Apply for the visa at a Portuguese embassy or consulate in their home country.
- RNH Regime: Submit an application to the AT within four months of starting employment in Portugal.
Legal References
The tax incentives for expatriates and digital nomads in Portugal are established in the following legal texts:
- Decree-Law No. 249/2009: Non-Habitual Resident Regime
- Decree-Law No. 14/2020: Digital Nomad Visa
- Decree-Law No. 100-A/2019: Special Tax Regime for High-Value Professionals
These tax policies aim to attract skilled professionals, entrepreneurs, and remote workers to Portugal. By offering tax incentives, the government seeks to promote economic growth, innovation, and the development of a knowledge-based economy.
If navigating the complexities of Portuguese tax laws seems daunting, consider seeking professional guidance. Heavnn's team of experts can simplify your tax planning journey in Portugal, ensuring you maximize the benefits available to expatriates and digital nomads.
