The Portuguese Government has created the non-habitual resident's (NHR) tax regime for personal income tax (IRS), with a view to attracting to Portugal, among others, pensioners received abroad (Investment Tax Code approved by Legislative Decree 249/2009, of 23 September).
With regard to retirees, a circular (n ° 9/2012 of 3 August 2012) recalls that European retirees who settle in Portugal benefit from a total exemption from the IRS (Portuguese Income Tax), while 10 years, on their retirement pensions.
The Tax Convention signed on 14 January 1971 (Decreto-Lei No 105/71 26 de março) between Portugal and France provides that: "pensions paid to a resident of a Contracting State in respect of past employment, are taxable only in that State. In other words, the pensions received should be taxed in the country of residence. Portugal has chosen not to do just that to attract retirees with high purchasing power and thus revive its economy.
On the other hand, French retired civil servants who receive their pension from the French State or a local authority are excluded from this benefit since the tax treaty signed on 14 January 1971 provides that the French State will tax these pensions even if the beneficiary his residence in the other Contracting State.
To benefit from the tax benefits, it is necessary to apply for non-habitual residence status with the tax authorities of Portugal.
To benefit from this scheme, you must first be a resident of Portugal in the fiscal sense.
The person concerned must meet the following conditions:
- not having been a Portuguese tax resident in the last 5 years, and residing for more than 183 days a year (whether or not followed) in Portugal during the year of application for the tax regime,
- or if the person concerned has spent less time, he must have in Portuguese territory on 31 December of the year in question, a dwelling in conditions which allow to suppose the present intention to maintain it and to occupy as usual residence.
Contact us to find out how to obtain the status of "non-habitual resident"