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Portugal's new tax regime

This webinar delved into the details of Portugal’s newly proposed NHR 2.0 tax incentive, designed for entrepreneurs and professionals bringing their productivity and overseas income from assets into the country, as well as new businesses, innovation, and scientific research.

This exclusive webinar featured tax advisors and wealth management specialists who discussed the eligibility criteria for NHR 2.0, activity requirements, and the key differences between the old and new NHR tax regimes.

Event Highlights:

• Accessing the Old NHR in 2024: Learn about the grandfathering conditions that allow access to the old NHR regime in 2024 and compare them with the new conditions coming in 2025.
• NHR 2.0 Unpacked: Gain a deeper understanding of NHR 2.0's eligibility conditions and how these are expected to evolve in 2025.
• Structuring Overseas Income and Assets: Discover the importance of structuring your income and assets both overseas and in Portugal to optimise for the future and protect your family.
• Mitigating Unnecessary Tax Burdens: Our expert panel will share case studies and explain how to structure your cross-border income and assets to ensure a European-facing, tax-efficient life in Portugal. This is crucial for existing NHR tax holders needing long-term protection, especially in the early years of their NHR status.
• Strategic Planning: Explore tailored wealth management strategies for navigating the complexities of different international jurisdictions from a Portuguese perspective.

The event  panellists included:

• Maria Alvarez Garcia, who is a Partner at Vida Advisors, who operate regulated investment funds approved for Golden Visa in Portugal. Maria is overseeing tax, legal, and fundraising having co-founded a €250M multiplatform previously. Maria also has experience in investment banking at Macquarie Bank and Barclays Capital and as an M&A and Tax Lawyer at Freshfields Bruckhaus Deringer.

• Niall Macdonald, who is a cross border wealth manager based in Portugal and supports numerous affluent families in Portugal especially those looking at the tax status in Portugal or already under NHR tax regime and need to plan and structure their income and assets for life in Portugal.

• Camila Riso de Sousa who is Director and Tax Manager at BDO International and is responsible for the global expats coming to Portugal, providing international and Portuguese tax advice to individual clients, national and foreign, VIPs with high net worth, expatriates.

Hosting this event, we had Steve Philp, Partnership Director at Portugal Pathways.
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Answers to key webinar questions from attendees

Disclaimer: The guidance below and Q&As should not be fully relied upon and does not constitute formal instructed professional advice. In relation to tax advice in Portugal, please engage and instruct a regulated professional for all tax advice and structured financial planning. Please contact Portugal Pathways if you would like an introduction to one of our professional advisors.

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Jane is asking:

If I apply for the old NHR tax regime at the financas this year does that guarantee me being accepted on the old NHR?

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Whether you get accepted into the old NHR tax regime if you apply in 2024, is soley dependant on you meeting the grandfathering conditions laid out by the government at the end of 2023. These state that you must have documentation proving your intent to reside in Portugal. These documentations may include:

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1. Obtained a Portuguese tax identification number (NIF) from the Portuguese tax authority, the Autoridade Tributária e Aduaneira (AT).

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2. Established a residential address in Portugal. This could be evidenced by a rental agreement, property ownership documents, and utility bills in your name.

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3. If you have dependants joining you in Portugal, provide proof of their schooling arrangements in the country before the 2023 December deadline for the school year ahead.

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4. Opened a Portuguese bank account to facilitate financial transactions and meet the residency requirements.

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5. For non-EU residents, you must also provide evidence of your intention to reside in Portugal. This could include a visa appointment confirmation, or a visa residency card issued prior to the December 31st deadline.

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Antonia is asking:

What do I need to be considered as a Portuguese Tax Payer in 2024?

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In Portugal, your residency status determines if you're considered a taxpayer. Generally, you're a tax resident if you spend at least 183 days (consecutively or not) in Portugal during the tax year (January 1st to December 31st).  Alternatively, even with fewer days in Portugal, you qualify as a resident if you have a permanent residence there on December 31st of the tax year.

As a resident, you'll owe taxes on your worldwide income. There are also simplified tax regimes for specific income categories, but residency is the key factor.

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Neil is asking:

Can you pause your NHR Status for 1 year?

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No, there's no pausing option for the NHR status in Portugal. It's an all-or-nothing program. If you currently hold NHR status, it applies to your worldwide income for the entire 10 year period granted. You can't temporarily suspend the benefits and then pick them back up later.

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David is asking:

Can the NHR be deferred by 1-2 years if applied for now.

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This is a complicated question and depends heavily on a number of circumstances such as you having proof of intent to qualify for grandfathering expemtions and other factors. It is highly recommended that you speak to one of our expert NHR tax advisors about this decision.

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James is asking:

On Pensions if you have old NHR does the 10% still apply ?

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Yes, if you currently have the old NHR tax regime you still qualify for the 10% tax on pensions.