Tax Regime for Non-Regular Residents in Portugal: A Competi­tive Advan­tage Beyond Borders

By José Alves do Carmo and Tânia Sofia Rosário, AVM Advogados

Sun, sea, reduced cost of living, safety, but mainly a lower tax burden. Portugal has long since ceased to be just a country at the tail of Europe. Its potential is known globally, being one of the most sought countries for investing and establishing residence. Approved in 2009, the Tax Regime for Non-Regular Residents (NRR) is yet another step towards international tax competitiveness.

The NRR is aimed at independent professionals and pensioners who wish to establish permanent residence in Portugal, as well as non-residents, dependent or independent workers, including members of statutory bodies of collective entities, who wish to establish a temporary residence due to expatriation or deployment.

Its main advantage, compared with other countries, is the special tax rate of 20% applicable for 10 years to income from activities of “high scientific, artistic or technical added value”, associated with the possibility of tax exemption for foreign sourced income, such as labour and property income, capital gains, interest or dividends. The creation of privileged income tax regimes results from the intersection of a country’s need to attract foreign investment and the market’s demand for favourable tax schemes. In an ever more globallycompetitive context with increasing mobility of people, fiscal policy is becoming a crucial instrument of economic recovery, expanding taxation beyond a simple domestic matter.

José Alves do Carmo

AVM Advogados, Lisbon, Portugal
T: +351 304 501 010, F: +351 304 501 009
E: This email address is being protected from spambots. You need JavaScript enabled to view it.; W: www.avm-advogados.com

Tânia Sofia Rosário

AVM Advogados, Lisbon, Portugal
T: +351 304 501 010, F: +351 304 501 009
This email address is being protected from spambots. You need JavaScript enabled to view it.; W: www.avm-advogados.com

Published: May 2017 l Photo: Colourbox.de - Paulo Vítor Martins