There was a large-scale debate around the end of the Non-Habitual Resident ("NHR") tax regime under the 2024 Budget Bill. Here is a clear summary of what was actually approved and what it means today.
The original NHR, as it existed for several years, ended on 31 December 2023. A new regime that mimics most of its benefits (with the exception of the treatment of pension income) applied from 1 January 2024, commonly called "NHR 2.0," and now formalised as the IFICI regime (Incentivo Fiscal à Investigação Científica e Inovação). Its scope of beneficiaries is different and narrower than the original.
Grandfathering Provisions
If you wanted to access the "old NHR" after 31 December 2023, you needed to fall under one of the grandfathering provisions, broadly:
- Having started a residence-visa or residence-permit procedure with the competent authorities by 31 December 2023 (including requesting or attending an appointment, or submitting the request); or
- Holding a residence visa or residence permit valid until 31 December 2023; or
- Having a promissory or employment contract, promise or secondment agreement signed by 31 December 2023 for duties in Portugal; or
- Having a lease or other contract granting use or possession of property in Portugal concluded by 10 October 2023; or
- Having a reservation or promissory contract for acquiring property rights in Portugal concluded by 10 October 2023; or
- Having dependants enrolled at an educational establishment in Portugal by 10 October 2023.
For the avoidance of doubt, existing NHR beneficiaries registered as NHR on 31 December 2023 continue to benefit from the regime until the end of their 10-year period.
NHR 2.0 / IFICI
The successor regime also applies for 10 years, to those who become Portuguese tax residents having not been resident in Portugal in any of the previous five years. IFICI provides a 20% rate on qualifying employment and freelance income and an exemption on several categories of foreign-sourced income, such as dividends, interest, capital gains and rents, but it is targeted at qualifying activities in research, higher education, innovation and certain roles, rather than being a general foreign-income shelter.
For anyone planning tax residence in Portugal alongside a Golden Visa or other route, this is an area for specialist, up-to-date tax advice rather than reliance on the old NHR framework.
