Personal income Tax Non Regular Regime 
Portugal Non  Regular Tax  Regime

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                                            Portugal -PERSONAL INCOME TAX  

 

                                                    FOR NON-REGULAR RESIDENTS

 

The Portuguese tax system for the " non-regular resident"

If you exercise one of these professions  ?

  • With the exemption method, income obtained abroad is totally exempted* andincome of categories A and B obtained abroad, not covered by this method, are
  • 1 - Architects, engineers and similar:
  • 101 - Architects
  • 102 - Engineers
  • 103 - Geologists
  • 2 - Visual artists, actors and musicians:
  • 201 - Theater, ballet, cinema, radio and television artists
  • 202 - Singers
  • 203 - Sculptors
  • 204 - Musicians
  • 205 - Painters 3 - Auditors:
  • 301 - Auditors 302 - Tax Consultants 4 - Doctors and dentists
  • 401 - Dentists
  • 402 - Medical Analysts
  • 403 - Clinical Surgeons
  • 404 - Ship's doctor
  • 405 - General Practitioners
  • 406 - Dentists
  • 407 - Clinical dentists
  • 408 - Medical physiatrists
  • 409 - Gastroenterologists
  • 410 - Ophthalmologists
  • 411 - Orthopedic Surgeon
  • 412 - ENT(Ear Nose and Throat) specialists
  • 413 -Pediatricians
  • 414 - Radiologists
  • 415 - Doctors from other specialties
  • 5 - Teachers: 501 - Professors 6 - Psychologists:
  • 601 - Psychologists
  • 7 - Liberal Professionals, technicians and alike:
  • 701 - Archaeologists
  • 702 - Biologists and life sciences experts
  • 703 - Computer Programmers
  • 704 - Software consultant and activities related to information technology and computing
  • 705 - Computer programming activities
  • 706 - Computer consultancy activities
  • 707 - Management and operation of computer equipment
  • 708 - Data services
  • 709 - Data processing, hosting and related activities; Web portals
  • 710 - Data processing, hosting and related activities
  • 711 - Other data service activities
  • 712 - News agencies
  • 713 - Other information service activities
  • 714 - Scientific research and development
  • 715 - Research and experimental development on natural sciences and engineering
  • 716 - Research and development in biotechnology
  • 717 - Designers
  • 8 - Investors, Managers and Directors:
  • 801 - Investors, Directors and managers of companies that promote productive investment, as long as they are connected to projects and concession contracts that are eligible for tax benefits per the Investment Tax Code
  • 802 - Upper Management

This fiscal regime competitive advantages are:

  • Taxation, over a period of 10 years, at a fixed income tax rate of 20% on income earned in Portugal
  • The absence of double taxation in the case of pension income and dependent and independent work abroad

The non-regular resident tax regime is available for citizens meeting the following conditions:

• Regarded resident on Portuguese territory for tax purposes, in the year to be taxed as a non-regular resident;

• Not been believed resident on Portuguese territory during the 5 years prior to the year pretended to be taxed as a non-regular resident;

Registering as a tax resident in Portugal with the Tax Authority, implies you must have remained in Portugal for more than 183 days, followed or interpolated, or have stayed for less time, there, on December 31 of that year, or housing which imply the intention to maintain and occupy it as habitual residence.

A citizen considered non-regular resident has the right to be taxed according to the non- regular resident tax scheme during a period of 10 consecutive years.

This period is not extendable!

The right to be taxed according to the non-regular resident tax regime in each year of the abovementioned period depends on the fulfilment of the condition of being deemed resident on Portuguese territory.

Whenever the citizen has not benefited from right to be taxed according to the tax regime defined for non-regular residents in one or more years of that 10 years period, still may benefit again from that same right in any of the remaining years of that period, provided the citizen still has a resident status for income tax purposes.

Beside Pensions, there are work activities that are considered of high added value, of scientific, artistic or technical nature, for the purposes of application of the non-regular resident regime.

Taxation

a) Portuguese Source Income

If net income origin is either from employment (fiscal category A) and self-employment (fiscal category B) obtained from high added value activities, of scientific, artistic or technical nature mentioned above, by non-regular residents on Portuguese territory are taxed at the special rate of 20%.

b) Foreign Source Income

Is under the Elimination of international juridical double taxation trough the exemption method. The State / countries with double taxation convention with the Portuguese Republic list, can be found here.

To category A (employment) income obtained abroad by non-regular residents on Portuguese territory, if:

Person taxed by the source State, according to the convention to eliminate double taxation entered into by Portugal and the source State/Country; OR

They can be taxed in another country, in cases where the convention to eliminate double taxation has not been held, as long as the income obtained is not considered to have been obtained in Portuguese territory.

To categories B (Self Employment), E (Capital Income), F (Real State Income) and G (Increase in Wealth), are exempt if alternatively:

They are taxed by the source State/Country, according to the convention to terminate double taxation entered into by Portugal and the source State; OR

They can be taxed in another country, in cases where the convention to terminate double taxation has not been held into under the terms de defined by the OECD Model Tax Convention on Income and Capital, as long as it is not a territory subject to privileged tax systems.

To category H (pensions) - Portuguese non-regular residents that have obtained retirement income in foreign countries, have exemption if these are from contributions that have not been deducted under and if the conditions below are met:

They are taxed by the source State/country, according to the convention to eliminate double taxation held by Portugal and the source State; or

They cannot be considered to have been obtained on Portuguese territory as per se.