THE PORTUGUESE NON- HABITUAL RESIDENT TAX REGIME

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1 THE PORTUGUESE NON- HABITUAL RESIDENT TAX REGIME ANTONIO TOMASSINI - HEAD OF TAX ITALY - ANTÓNIO MOURA PORTUGAL HEAD OF TAX PORTUGAL, DLA PIPER

2 What is it? Portugal has a special tax regime for new residents which offers them attractive tax opportunities at the individual level. Foreign tax residents wishing to become resident in Portugal may benefit from exemption or mitigation of taxation on their income for a 10 year period

3 Requirements To qualify as a NHR, an individual must : Be a tax resident under Portuguese domestic legislation Not have been a Portuguese tax resident in the five years prior to taking up residence in Portugal. Submit a request to register as a NHR in the Tax Authorities website (until March 31 st the year after becoming a resident in Portugal)

4 Requirements Portuguese tax residency, regarding Portuguese Personal Income Tax purposes, may be acquired via two different ways, such as: Have remained in national territory more than 183 days, followed or interpolated, in any period of 12 months beginning or ending in the year in question. Having stayed less time, to have a dwelling in the national territory at any time during the referred period, under conditions that suggest that they intend to maintain and occupy it as an habitual residence

5 Tax regime applicable in Portugal to Passive Income from Foreign Source Interest Dividends Capital Gains on Movable Property Capital Gains on Immovable Property Possibility of exemption (provided that this income is liable to taxation in the source country under the DTA entered into between PT and the source country) Interest originated in tax havens, which do not have DTA with PT, are taxed at a 35% rate. Possibility of exemption (provided that this income is liable to taxation in the source country under the DTA entered into between PT and the source country) Dividends originated in tax havens, which do not have DTAs with PT, are taxed at a 35% rate. Taxed at a 28% rate (possibility of exemption provided that this income is liable to taxation in the source country under the DTA entered into between PT and the source country) Possibility of exemption (provided that this income is liable to taxation in the source country under the DTA entered into between PT and the source country)

6 Tax regime applicable in Portugal to Passive Income from Foreign Source Royalties Real Estate Income Pensions Possibility of exemption (provided that this income is liable to taxation in the source country under the DTA entered into between PT and the source country) Royalties originated in tax havens, which do not have DTA with PT, are taxed at a progressive rate. Possibility of exemption (provided that this income is liable to taxation in the source country under the DTA entered into between PT and the source country) Property income from tax havens, which do not have DTA with PT, are taxed at a 28% rate. Possibility of exemption provided that this income is not considered as obtained in Portugal

7 Tax regime applicable in Portugal to Active Income from Foreign Source Income from Selfemployment Income from Employment Possibility of exemption if this income is earned in relation with activities of high added value *, eg managers and senior managers of companies, and if it is liable to taxation in the source country under the DTA entered into between PT and this country. Possibility of exemption only if this income is effectively taxed in the source State (not PT) under the DTA entered into between PT and this country. * Ministerial Order nº 10/2012 Note: The exemption from taxation in Portugal as a state of residence does not preclude the possibility of income being taxed in the State of Source under its DTA

8 Tax regime applicable in Portugal to Passive Income from Portuguese Source Interest Dividends Capital Gains on Movable Property Capital Gains on Imovable Property Taxed at a 28% rate Taxed at a 28% rate The balance between the capital gains and losses is taxed at a 28% rate Taxed at progressive rates, on about 50% of its value

9 Tax regime applicable in Portugal to Passive Income from Portuguese Source Royalties Real Estate Income Pensions Taxed at a 28% rate Taxed at a 28% rate Taxed at progressive rates

10 Tax regime applicable in Portugal to Active Income from Portuguese Source Income from Selfemployment Income from Employment Taxed at a rate of 20% if it is earned in activities of high added value *, eg architects, engineers, doctors, teachers, computer scientists, researchers, administrators and senior managers. * Ministerial Order nº 10/

11 Step list Procedure Obtaining a non-residenttaxidentificationnumber (NIF) Obtain a Portuguese dwelling (rental or acquisition) If EU citizen: obtaining a Certificate of EU resident in the City Hall (proof of Portuguese residency) If Non-EU citizen: obtaining a Residence Permit/Golden VISA in the Portuguese Foreigners and Border Service (SEF) Register as Portuguese Tax resident and request the Portuguese Tax Authorities website password Submit a request to register as a NHR in the Tax Authorities website (until March 31 st the year after becoming a resident in Portugal) In case of exercising H.A.V. activity, send the Directorate of Taxpayer Registration Services a document proving the exercise of the H.A.V activity

12 DLA Piper Services Kick-off/presentationofthe NHR regime Individual analysisofeachclient, in order to assessiftheclientmayrequest a NHR status andifhe/she can benefitfromthe NHR regime Assistingtheclient in obtaining a residencycertificate (EU) / permission (non-eu) Submissionoftherequest to register as a NHR Draftingandsubmissionof a reply to thetaxauthoritiesifadditionalelements are requestedwithintheprocedureofapplication to the NHR regime

13 DLA Piper Services Drafting/analysinganycontractsneeded in order to purchaseorrent a Portuguese dwelling AssistingtheClient in registering/changinghis/herdriver slicencewiththeauthorityofmobilityandtransports AssistingtheClientonbringing to Portugal anyvehíclesownedabroad AssistingtheClient to registerwiththe Portuguese Social SecurityandNationalHealthSystem StructuringtheClient s financial porfolio, in order to fullybenefitfromalltheexemptionsforessen in the Portuguese NHR regime

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