TAX SYSTEM IN PORTUGAL
Tax system in Portugal
Main benefits of retirement in Portugal
Tax and financial advantages
- Lower cost of living, enabling you to optimize your pension and acess a higher standard of living
- Security for your capital thanks to a risk-free investment in property
- An investment with no exchange rate risk beacause it stays in the Euro zone
- Tax agreements between EU countries mean that you avoid double taxation on your income.
You quite simple have your pension paid into your bank account in your country of origin.
- Tax advantages for Portuguese residences (no inheritance tax)
- A gentle climate and peaceful way of life in diverse landscapes with welcoming people who often know how to speak English.
- Many dailyflights to major European cities from Lisbon airport at very competitive prices.
- A high standard of living.
- A health system that conforms to European standards and requirements.
- Third safest country in the world.
- A large European community.
- Very little culture shock compared with countries of very different cultures.
IMT – Property Purchase Tax
Stamp duty: Property acquisition is also subject to stamp duty, which is paid by the buyer at a rate of 0,8% of the transaction price or VPT (the rateable value), whichever is higher.
Non Habitual Resident Status
How do you get non-habitual resident (NHR) status?
- You may not have been a Portuguese resident in the last five years.
- Register as resident in Portugal for taxes purposes with the local tax office (for that, you must have stayed in Portugal for more thant 183 consecutive or non-consecutive days, or, if you have stayed for less time you need to have been resident at a property on the 31st December of the same year and the situation must indicate that you intend keeping and occupying the property as your main residence)
- Request non-habitual resident status at the same time as you register as resident in Portugal for tax purposes, or before the 31st March of the year following the year you became resident in Portugal.
Comparative advantages of NHR status:
- For 10 years’ tax is fixed at a rate of 20% on the income of natural persons (income tax) for any income received for activities in Portugal.
- No double taxation on any pensions or income as an employee or as a self-employed person done abroad.
- A law is anticipated that will create a 17% progressive tax rate.
Those holding a residency permit for investments are entitled to:
Who can request a residency permit for investments?
Non EU-Citizens making, either personally or through the intermediary of a company, an investment in Portuguese territory for a minimum duration of five years that meets at least of one of the following criteria: