What Happened to Portugal’s Tax Rules?
Portugal had a special tax program called NHR (Non-Habitual Resident). It let people pay less tax for 10 years if they move there. Many retirees and remote workers loved it. But in 2023, Portugal stopped NHR. Then, a new government brought it back with changes. They named it NHR 2.0 or TISRI (Tax Incentive Scheme for Scientific Research and Innovation).
The old NHR helped everyone, but the new rules focus on people who can boost Portugal’s economy. Think teachers, scientists, or tech experts.
The New NHR 2.0: What You Need to Know
NHR 2.0 works like this:
Flat 20% Tax: Pay 20% tax on work income (jobs or freelance work).
Foreign Income: No tax on dividends, rentals, or investments if the money comes from approved countries.
Pensions: Retirees pay normal taxes on pensions now.
Example: If you earn €50,000 from a job in Portugal, you pay €10,000 in taxes. Before, pensions were tax-free. Now, pensions follow regular tax rates.
Income Type | Old NHR Tax | NHR 2.0 Tax |
Job Income | 20% | 20% |
Pensions | 0% | Up to 48% |
Who Can Use NHR 2.0?
You qualify if:
You move to Portugal in 2024 or later.
You didn’t live there in the last 5 years.
You work in:
Universities or research.
Companies that export 50%+ of their products.
Certified startups or tech innovation.
Pro Tip: Keep proof of your job role. Portugal may ask for contracts or company details.
How Taxes Work Under NHR 2.0
Work Income: 20% flat tax.
Foreign Income: No tax if from “good” countries.
Pensions: Taxed normally (14.5%-48%).
Work Income (20%)
Pensions (Up to 48%)
Retirees: How NHR 2.0 Affects You
Retirees used to pay 0% tax on pensions. Now, pensions are taxed like regular income. For a €30,000 pension, you might pay €4,350 to €14,400 yearly.
Advice: Retirees should compare Portugal’s taxes with their home country. Some places still offer better deals.
Jobs Portugal Wants for NHR 2.0
Portugal needs:
Teachers/Researchers: Especially in science or tech.
Export Experts: Companies selling goods abroad.
Startup Teams: People in registered startups.
Story: A client named Ana moved her AI startup to Porto. Her team got NHR 2.0, saving €15,000/year.
Applying for NHR 2.0: A Step-by-Step Guide
Move to Portugal: Get a visa or residency.
Tax Registration: Visit Finanças (tax office).
Submit Proof: Show job contracts or company documents.
Timeline: Start 3-6 months early. Delays happen if paperwork is incomplete.
Life in Portugal Beyond Taxes
Portugal offers:
Affordable Living: Lower costs than France or Germany.
Safety: Low crime rates.
Beaches/Weather: Sunny coasts and mild winters.
Tip: Learn basic Portuguese. Locals appreciate it!
Frequently Asked Questions
1. Can I apply if I lived in Portugal before?
No. You must not have been a resident in the last 5 years.
2. How long do NHR 2.0 benefits last?
10 years from approval.
3. Are remote jobs eligible?
Yes, if your employer is outside Portugal.
4. Do I pay taxes in my home country too?
Depends on your country’s rules.
5. Can freelancers use NHR 2.0?
Yes. Freelance income gets the 20% rate.
6. What counts as a “startup” for TISRI?
Companies certified by Portugal’s Startup Council.
7. Are capital gains taxed?
No, if from non-blacklisted countries.
8. How do I prove my job qualifies?
Provide contracts, company export records, or startup certificates.
