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Non-Habitual Residents Scheme
Former Residents Program
Tax incentive for scientific research and innovation
On October 10, 2023, the Proposal for the 2024 State Budget was presented, proposing changes regarding non-habitual tax residents, the "Ex-Residents" program and the creation of a new tax incentive regime for scientific research and innovation:
1. Repeal of the regime for non-habitual residents (NHR), with the regime continuing to apply to taxpayers who:
- are registered as non-habitual residents when this law comes into force (which should be January 1st, 2024) and until the ten-year period provided for in the regime expires; or
- on December 31st, 2023, meet the conditions for registration as non-habitual residents, or hold a valid residence visa on that date, and must register as NHRs by March 31, 2024.
2. New "Former Residents" Program:
Taxpayers who:
- become tax residents in the years 2024 to 2026;
- provided they have not been considered resident in Portuguese territory in any of the previous five years;
may have excluded from taxation 50% of their income from dependent work and business and professional income.
A limit of €250,000 has been proposed for this tax exclusion. The regime applies for a period of five years.
3. The government is also proposing the creation of a "tax incentive for scientific research and innovation" regime for taxpayers who:
- become tax residents in Portugal;
- have not been tax resident in Portuguese territory in any of the previous five years;
- earn income that falls within the following categories:
- Higher education and scientific research teaching careers, integrated into the national science and technology system;
- Qualified jobs within the scope of contractual benefits for productive investment, under the terms of specific legislation;
- Research and development jobs, with a minimum qualification of a PhD, if certain conditions are met.
This regime provides for taxation at a special rate of 20% on net income from dependent work (category A) and business and professional income (category B) arising from the activities listed, for a period of ten consecutive years, as well as exemption on income from dependent work, business and professional income, capital income (category E), rental income (category F) and capital gains (category G) obtained abroad.