Portugal › Comparisons › IFICI (NHR 2.0) vs NHR (Legacy / pre-2024)
IFICI (NHR 2.0) vs NHR (Legacy / pre-2024)
IFICI (NHR 2.0) and NHR Legacy both offer a 20% flat rate on Portuguese-source employment income — but they differ fundamentally on foreign income treatment, pension rates, and availability. NHR Legacy is closed to new applicants; IFICI is open from 2024 onward.
Key differences
| Aspect | IFICI (NHR 2.0) | NHR (Legacy / pre-2024) |
|---|---|---|
| Availability | Open to new applicants from 2024 | Closed since January 2024 |
| PT-source flat rate | 20% (Cat. A/B qualifying activities) | 20% (Cat. A/B HVAA activities) |
| Foreign-source income | Taxed at standard rates (28% Cat. E/F, progressive Cat. A/B) | Generally exempt if source country has taxing rights |
| Foreign pensions | Progressive rates (standard Cat. H) | 10% flat rate |
| AT approval required | Yes — activity must be pre-certified | No — declared on Modelo 3 |
| Duration | 10 years | 10 years |
Choose IFICI (NHR 2.0) if…
- Anyone establishing Portuguese tax residency from 2024 onward (NHR Legacy is no longer available)
- Tech workers, researchers, and qualifying professionals earning primarily Portuguese-source income
- Individuals whose main income is from a Portuguese employer or Portuguese clients
Choose NHR (Legacy / pre-2024) if…
- NHR Legacy is not a choice — it was closed to new applicants in January 2024
- Existing NHR Legacy holders with foreign-source income (especially foreign pensions) retain significant advantages
- Those registered under NHR Legacy before 2024 should continue using their remaining years
Bottom line
If you're establishing Portuguese residency in 2024 or later, IFICI is your only option for a special regime (unless you're under 35 and eligible for IRS Jovem). IFICI is well-suited for those whose income is primarily Portuguese-source. Those with NHR Legacy should treasure their remaining years — particularly if they have foreign pensions or foreign investment income.
Frequently asked questions
Can I switch from NHR Legacy to IFICI?
No. NHR Legacy holders cannot switch to IFICI during their 10-year window. You remain on NHR Legacy for the remainder of your 10 years, then transition to standard IRS (or re-apply for IFICI if still eligible and within 5 years of first Portuguese residency).
Is IFICI better than NHR Legacy?
IFICI is better for those with high Portuguese-source employment income and limited foreign income. NHR Legacy was better overall — especially for those with foreign pensions (10% flat) or foreign investment income (exempt). NHR Legacy holders are generally considered to have won the 'regime lottery' and should maximize their remaining years.
IFICI (NHR 2.0) details
Eligibility, rates, legal basis
→NHR (Legacy / pre-2024) details
Eligibility, rates, legal basis
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