Portugal’s NHR offers new residents very attractive tax advantages and some foreign income will be exempt from Portuguese tax; foreign pension income benefits from a special fixed low tax rate, and local high value employment is also taxed at a lower rate than usual open to people who have not lived in Portugal in recent years.
If you considered moving to Madeira for a healthier, more relaxed lifestyle and wasintroduced by the Portuguese government in 2009 to attract ‘high value’ foreign residents to live in Portugal. It therefore offers reduced tax rates and some tax-free exemptions for your first ten consecutive years in the country.
A reduced tax rate on high-value Portuguese employment income
Most NHR tax advantages apply to foreign income, but if you are employed in Portugal in a ‘high value activity’, you can benefit from a flat 20% income tax rate on this employment income. This is instead of the scale rates of tax that range from 14.5% to 48% and you must work in one of the pre-defined scientific, artistic or technical professions to qualify.
Tax residents normally pay Portuguese tax on their worldwide income. However, the non-habitual residence regime provides the opportunity to receive foreign income completely free of further Portuguese tax.
