NHR (Legacy / pre-2024)
- Flat rate
- 20%
- Duration
- 10 years
- Legal basis
- Art. 16(8)–(12) CIRS (transitional, Lei 82/2023)
Eligibility
- Became Portuguese tax resident before 2024 cut-off
- Not a Portuguese tax resident in any of the 5 prior years
- Registered as NHR with AT (Autoridade Tributária)
What is NHR Legacy?
The Non-Habitual Resident regime is a preferential tax status Portugal introduced in 2009 for new tax residents engaged in high-value-added (HVA) activities or receiving foreign income. It grants a flat 20% rate on qualifying Portuguese-source employment and self-employment income, and 10% on foreign pensions, for a non-renewable period of 10 years.
The regime was closed to new applicants in January 2024 under Lei 82/2023. Taxpayers who registered before the cut-off retain their benefits for the remainder of their 10-year window under transitional rules.
Key benefits
- 20% flat rate on Portuguese-source Cat. A and Cat. B income from high-value-added activities (HVA list, Portaria 230/2019).
- 10% flat rate on foreign Cat. H pension income — the headline benefit for retirees relocating to Portugal.
- Foreign Cat. A / B / E / F / G income exempt under double-taxation treaty conditions (income that may be taxed in the source country).
- 10 consecutive years from the year of first NHR registration with AT.
High-value-added activities
The 20% flat rate on Portuguese-source income applies only if the taxpayer’s activity appears on the HVA list (Portaria 230/2019). Key categories include:
- Architects, engineers, and geologists
- IT professionals, programmers, and data scientists
- Auditors, tax consultants, and accountants
- Medical doctors, dentists, and veterinarians
- University professors and scientific researchers
- Highly qualified directors and managers of companies with significant export or investment activity
Income from activities outside the HVA list is taxed at standard progressive rates even if the taxpayer holds NHR status.
The 5-year rule
To qualify for NHR, the applicant must not have been a Portuguese tax resident in any of the five years immediately preceding the application year. Partial-year residence does not count — the full calendar year must have been spent as a non-resident.
After the 10-year window
Once the 10-year NHR period expires, the taxpayer reverts to standard IRS treatment: progressive rates up to 48%, no flat rate on employment income, and foreign pensions taxed at marginal rates rather than 10%. Planning around this transition — whether by restructuring income sources or evaluating IFICI eligibility for a new qualifying activity — is advisable well before year 10.
NHR Legacy vs IFICI
| NHR Legacy | IFICI (NHR 2.0) | |
|---|---|---|
| New applicants | Closed since Jan 2024 | Open (from 2024) |
| Eligibility | Open to qualifying new residents | Activity-gated |
| PT-source income rate | 20% flat (HVA activities) | 20% flat |
| Foreign pensions (Cat. H) | 10% flat | Standard progressive |
| Foreign income (Cat. A/B/E/F/G) | Exempt under DTT | Exempt under DTT |
| Duration | 10 years | 10 years |
The 10% foreign pension rate is the key advantage NHR Legacy holds over IFICI. Taxpayers who secured NHR status before 2024 and have foreign pension income should confirm they remain registered and track their remaining years carefully.