Tax status and Non Habitual Tax Resident

Tax status and Non Habitual Tax Resident

The tax system for foreign residents is one of the significant assets of the country!

The tax system for foreign residents is one of the significant assets of the country!

The tax situation of the non-permanent resident in Portugal
Non-Habitual Residents and Taxation in Portugal

With the establishment of a tax treaty between France and Portugal, the status of Resident Non-Tributary RNH (RNH) was recognized by Portugal since the decree of September 23, 2009.

RNH Status: The Non-Habitual Residual Tax System

Since January 2013, outside income (including non-public sector pensions) for non-resident residents is exempt from taxation.

Why should you become a non-resident?

The Portuguese government demonstrates its willingness to bring French and foreign pensioners to its territory, thereby establishing a tax exemption on their income. It's time to move to Portugal, a good miuto country to live and to benefit from an advantageous tax exemption. With this new law, the country wants to attract retirees from the private sector, as well as people with so-called passive income (interest, dividends, royalties, capital gains, property income, etc.).

1. Exemption from pension tax obtained by non-habitual residents

Point 6 of art. 81 of the CIRS

Pensions paid abroad by NHRs are exempt from personal income tax if such pensions are subject to taxes under a Double Taxation Agreement.

Portugal and France signed this tax convention; The French reforms of the private sector are therefore totally tax free.

Beware, however, this exemption is not valid for French public sector pensions.

- Income tax exemption on non-habitual residents

Wages, provided they are paid by a non-Portuguese source, are exempt from taxes. Rental income, investment income and capital gains from a non-Portuguese source obtained by non-residents are also exempt from income tax.

How to obtain non-habitual resident status?

To obtain NHR status, it is necessary to fulfill two simple requirements:

 

Being a tax resident in Portugal

To do so, your main residence must be in Portugal, so you must stay for more than 183 days in a fiscal year (January 1 to December 31) or have accommodation in Portugal on December 31 of this year with the intention of keeping her as usual residence.

Important Note: You are not required to spend more than 183 consecutive days in your residence in Portugal to be considered as a non-habitual resident. Only the total number of business days during the tax year is considered.

For example, you can do three stays for two months and have RNH status. So it is totally free.

 

Not having been a tax resident in Portugal for the last five years

Suffice it to state that you are not a Portuguese resident in the last five years. Some tax services may possibly require proof of tax residence in another country.

What is the duration of non-habitual resident status?

The non-habitual resident is entitled to exemption from certain taxes for a period of 10 consecutive years from the year of his registration as a resident in national territory.

For this purpose, he must be considered resident in the Portuguese territory each of these 10 years. This 10-year period is not currently expected to be renewable. After 10 years, the citizen will be considered as a full Portuguese resident.

France-Portugal Tax Convention for NHRs at a glance

There is no double taxation thanks to the tax convention.

Real estate gains and income taxed in the country of the situation of the building.

Capital gains and income tax payable in the country of residence (subject to certain taxes withheld at source).

Wages: taxed in the country where the activity is performed, except in special cases.

Private pensions: taxable in the country of residence.

Public pensions: taxable in the country that pays them.

If each country considers the person as a tax resident, the residence is determined by the disposition of a permanent home. If they have a home in each country, personal and economic ties (the center of vital interests) are taken into account. If not, other criteria will apply.

For more information about RNH's status in Portugal, contact our services.

The tax situation of the non-permanent resident in Portugal
Non-Habitual Residents and Taxation in Portugal

With the establishment of a tax treaty between France and Portugal, the status of Resident Non-Tributary RNH (RNH) was recognized by Portugal since the decree of September 23, 2009.

RNH Status: The Non-Habitual Residual Tax System

Since January 2013, outside income (including non-public sector pensions) for non-resident residents is exempt from taxation.

Why should you become a non-resident?

The Portuguese government demonstrates its willingness to bring French and foreign pensioners to its territory, thereby establishing a tax exemption on their income. It's time to move to Portugal, a good miuto country to live and to benefit from an advantageous tax exemption. With this new law, the country wants to attract retirees from the private sector, as well as people with so-called passive income (interest, dividends, royalties, capital gains, property income, etc.).

1. Exemption from pension tax obtained by non-habitual residents

Point 6 of art. 81 of the CIRS

Pensions paid abroad by NHRs are exempt from personal income tax if such pensions are subject to taxes under a Double Taxation Agreement.

Portugal and France signed this tax convention; The French reforms of the private sector are therefore totally tax free.

Beware, however, this exemption is not valid for French public sector pensions.

- Income tax exemption on non-habitual residents

Wages, provided they are paid by a non-Portuguese source, are exempt from taxes. Rental income, investment income and capital gains from a non-Portuguese source obtained by non-residents are also exempt from income tax.

How to obtain non-habitual resident status?

To obtain NHR status, it is necessary to fulfill two simple requirements:

 

Being a tax resident in Portugal

To do so, your main residence must be in Portugal, so you must stay for more than 183 days in a fiscal year (January 1 to December 31) or have accommodation in Portugal on December 31 of this year with the intention of keeping her as usual residence.

Important Note: You are not required to spend more than 183 consecutive days in your residence in Portugal to be considered as a non-habitual resident. Only the total number of business days during the tax year is considered.

For example, you can do three stays for two months and have RNH status. So it is totally free.

 

Not having been a tax resident in Portugal for the last five years

Suffice it to state that you are not a Portuguese resident in the last five years. Some tax services may possibly require proof of tax residence in another country.

What is the duration of non-habitual resident status?

The non-habitual resident is entitled to exemption from certain taxes for a period of 10 consecutive years from the year of his registration as a resident in national territory.

For this purpose, he must be considered resident in the Portuguese territory each of these 10 years. This 10-year period is not currently expected to be renewable. After 10 years, the citizen will be considered as a full Portuguese resident.

France-Portugal Tax Convention for NHRs at a glance

There is no double taxation thanks to the tax convention.

Real estate gains and income taxed in the country of the situation of the building.

Capital gains and income tax payable in the country of residence (subject to certain taxes withheld at source).

Wages: taxed in the country where the activity is performed, except in special cases.

Private pensions: taxable in the country of residence.

Public pensions: taxable in the country that pays them.

If each country considers the person as a tax resident, the residence is determined by the disposition of a permanent home. If they have a home in each country, personal and economic ties (the center of vital interests) are taken into account. If not, other criteria will apply.

For more information about RNH's status in Portugal, contact our services.

The tax situation of the non-permanent resident in Portugal
Non-Habitual Residents and Taxation in Portugal

With the establishment of a tax treaty between France and Portugal, the status of Resident Non-Tributary RNH (RNH) was recognized by Portugal since the decree of September 23, 2009.

RNH Status: The Non-Habitual Residual Tax System

Since January 2013, outside income (including non-public sector pensions) for non-resident residents is exempt from taxation.

Why should you become a non-resident?

The Portuguese government demonstrates its willingness to bring French and foreign pensioners to its territory, thereby establishing a tax exemption on their income. It's time to move to Portugal, a good miuto country to live and to benefit from an advantageous tax exemption. With this new law, the country wants to attract retirees from the private sector, as well as people with so-called passive income (interest, dividends, royalties, capital gains, property income, etc.).

1. Exemption from pension tax obtained by non-habitual residents

Point 6 of art. 81 of the CIRS

Pensions paid abroad by NHRs are exempt from personal income tax if such pensions are subject to taxes under a Double Taxation Agreement.

Portugal and France signed this tax convention; The French reforms of the private sector are therefore totally tax free.

Beware, however, this exemption is not valid for French public sector pensions.

- Income tax exemption on non-habitual residents

Wages, provided they are paid by a non-Portuguese source, are exempt from taxes. Rental income, investment income and capital gains from a non-Portuguese source obtained by non-residents are also exempt from income tax.

How to obtain non-habitual resident status?

To obtain NHR status, it is necessary to fulfill two simple requirements:

 

Being a tax resident in Portugal

To do so, your main residence must be in Portugal, so you must stay for more than 183 days in a fiscal year (January 1 to December 31) or have accommodation in Portugal on December 31 of this year with the intention of keeping her as usual residence.

Important Note: You are not required to spend more than 183 consecutive days in your residence in Portugal to be considered as a non-habitual resident. Only the total number of business days during the tax year is considered.

For example, you can do three stays for two months and have RNH status. So it is totally free.

 

Not having been a tax resident in Portugal for the last five years

Suffice it to state that you are not a Portuguese resident in the last five years. Some tax services may possibly require proof of tax residence in another country.

What is the duration of non-habitual resident status?

The non-habitual resident is entitled to exemption from certain taxes for a period of 10 consecutive years from the year of his registration as a resident in national territory.

For this purpose, he must be considered resident in the Portuguese territory each of these 10 years. This 10-year period is not currently expected to be renewable. After 10 years, the citizen will be considered as a full Portuguese resident.

France-Portugal Tax Convention for NHRs at a glance

There is no double taxation thanks to the tax convention.

Real estate gains and income taxed in the country of the situation of the building.

Capital gains and income tax payable in the country of residence (subject to certain taxes withheld at source).

Wages: taxed in the country where the activity is performed, except in special cases.

Private pensions: taxable in the country of residence.

Public pensions: taxable in the country that pays them.

If each country considers the person as a tax resident, the residence is determined by the disposition of a permanent home. If they have a home in each country, personal and economic ties (the center of vital interests) are taken into account. If not, other criteria will apply.

For more information about RNH's status in Portugal, contact our services.

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