Portugal Taxation

Portugal's NHR Regime will be ending in 2024.

Portugal has beneficial tax regimes such as Non Habitual Residency (NHR), and other pension & investment tax advantages. You will need to be aware of the taxation in Portugal affecting your financial affairs, in addition to the expat tax benefits. There are many pension concerns when relocating, such as tax on pension income withdrawals.

Non-Habitual Resident (NHR) regime

This is available to anyone who has the right to reside in Portugal (an EU/EEA/Swiss citizen) and has not been a tax resident of Portugal during the previous 5 years. The NHR resident will gain from a 20% flat rate of taxation on vocational income, and if the individual is retired, an undertaking that any foreign pension received is taxed at 0%. NHR registration is guaranteed for a period of 10 years.

UK pensions

British nationals settling and retiring to Portugal can benefit from significant tax benefits on their pension income receipts. Tax treatment applicable is a 10% tax on foreign pension income.

Not only does Portugal have NHR, as detailed above, but residents that are not of NHR status can take advantage of Portugal's Category "H" regime, where it is possible to receive up to 85% of your pension income free of tax. To take advantage of this beneficial tax regime, an expat must explore the options available to their UK pensions funds, by using a Qualifying Recognised Overseas Pension Scheme (QROPs) or other international pensions arrangements.

Compliant Investments

Our Clear Quest Capital arrangement can ensure that you have a tax compliant investment structure to take advantage of certain tax benefits and reduce the exposure to the Capital Gains tax rate of 28% applying to investment interest and profits. Often, many expatriates believe that their investments will receive the same tax treatment in the country of origin, for example, UK ISAs being tax free in the UK. However in Portugal, such ISA accounts are taxable on the interest and profits gained in the tax year at 28%. Clear Quest offers the mitigation solution.

Clear Quest is a tax mitigation scheme with the aim to legitimately reduce tax liabilities levied upon income, investment interest and dividends earned from invested capital or investment products. With tax rates at 28% levied upon interest earned and dividends paid, recipients of such incomes in Portugal can mitigate this tax rate ordinarily charge.