Posted by: Carlos Tome & filed under Non Residents.

Created in 2009, the tax regime for Non-Habitual Residents (NHR), allows retirees who receive pensions paid by another country, the possibility to enjoy exemption from the payment of IRS in Portugal, as long as there is a Double Taxation Agreement who gives the country of residence (Portugal) the right to tax the pensions. 

The Non-Habitual resident can benefit from this tax regime for a maximum period of 10 years.

On March 31, the Budget for 2020 was published, through the Law nr. 2/2020, which change the NHR regime by applying a 10% tax rate on net pension earnings, which, in practice, ends with the total tax exemption.

However, that law determines that this 10% rate will only apply to non-habitual residents who are not yet register and benefiting from this tax regime, nor are within the period that allows them to register in such regime, upon entry into force of the law, that is, April 1, 2020.

This means that, who is already benefiting from this regime, keeps the total exemption until reaching the ten years period.

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