Non Regular Residents | RAX

How can you acquire Non-Regular Resident status?

Having not been a resident in Portugal for the last 5 years, you must register at the local tax office as a tax resident in Portugal. To be eligible to be tax resident in Portugal you must, by 31st December of that year:

1. Have remained in Portugal for more than 183 calendar days, which need not be continuous
2. Have a house in Portugal, in such conditions that would lead to the assumption that it is intended to be kept and occupied as your habitual residence
3. Additional information: http://info.portaldasfinancas.gov.pt/NR/rdonlyres/D0C80C76-3DA8-4B90-A1E4-FF53BD34EF95/0/IRS_RNH_EN.pdf

What are the taxation advantages to portuguese source income?

In the case of employment or self- employment, the applicable taxation rate is 20% (with an additional 3.5% surcharge in 2015).

Taxation applies to income derived from high added value activities of a scientific, artistic or technical nature:

• Architects, engineers and similar
• Fine artists, actors and musicians
• Auditors
• Doctors and dentists, teachers and psychologists
• Liberal professions, technicians and similar
• Senior managers
• Investors, directors and managers, when part of companies covered by the contractual regime provided for in the Investment Tax Code

What are the taxation advantages to foreign source income?

In the case of pensioners and retired people, they are exempt from taxation when:

• Income is taxed in the source State, in accordance with the convention to eliminate double taxation, signed by Portugal and that State or
• Income is not considered to have been obtained through a Portuguese source, according to the criteria provided for in the IRS Code (personal income tax)

In the case of income derived from employment, it is exempt from taxation when:

• Income is taxed in the State of origin, in accordance with the convention to eliminate double taxation, signed by Portugal and that State or
• If no convention to eliminate double taxation has been signed, as long as the income is not considered to have been obtained in Portuguese territory, in accordance with the criteria in article 18 of the IRS Code (personal income tax)

In the case of income from self- employment (through the provision of services of a high added value, of a scientific, artistic or technical nature, or through intellectual or industrial property, investment income, rental income, capital gains income or other increases in equity), it is exempt from taxation when:

• The income may be taxed in the source country, territory or region, in accordance with the convention to eliminate double taxation, or
• When no convention to eliminate double taxation has been signed, the OECD model convention may be applied (taking into consideration the observations and reservations made by Portugal) and as long as the source country, territory or region does not have a privileged tax regime, and as long as the income is not considered to have been obtained in Portuguese territory, in accordance with the criteria in article 18 of the IRS (personal income tax)