With the OE2024 proposal, the eligibility rules for the NHR tax regime change, with this program – which allows non-residents who move to Portugal to benefit from a 20% IRS rate – now covering people who earn income resulting from careers in higher education and scientific research teachers.
Income resulting from PhD research and development jobs is also eligible. As with the NHR still in force, they can benefit from the aforementioned 20% IRS rate for 10 years, and for this purpose they cannot have been tax residents in Portugal for the previous five years.
The type of eligible professions is one of the major differences compared to the current model – and for which people who, on December 31, 2023, meet the criteria required to be NHR or hold a visa, can still register until March 31, 2024.
In the model still in force, non-residents (foreigners or emigrants moving to Portugal can join the regime directly, as long as they have one of the professions on the list of professions considered to have high added value and which is defined by ordinance. For those tax experts consulted by Lusa, the new tax regime aimed at non-habitual residents will not be able to attract people to Portugal.
“The regime [created in the budget proposal] is completely ineffective in attracting anyone”, says inspector Luís Leon, from the consultancy Ilya, adding that, if it is not changed during the discussion, it will be “useless” since it is very limited”.
For Patrick Dewerbe, from the tax practice area at CMS Law, the elimination of the NHR constitutes “a blunder”, considering that the new regime “is not attractive at all” taking into account the type of professions and jobs covered.
I totally agree. The decision is so Lisbon / Porto centric and will have a devastating impact on the Algarve. In the 5 years I've been here there has been a big change for the better. The Govt should at a minimum have given businesses a 2 or 3 year advanced warning. Did Costa learn nothing from his mistakes earlier this year on rental properties.
By jeremy rumble from Algarve on 13 Oct 2023, 16:34
Not sure why this is a “blunder”? Seems to be only a blunder to those businesses that are affected and hardly need the tax breaks anyway. A much better regime that that currently existing, should drive away investors and speculators who contribute very little sustainable income into local economies. Good job!
By Stuart Wood from Algarve on 14 Oct 2023, 10:12
Seriously, why not give tax advantages to a wide panel of professionals such as artists and tax shelters for film industry like in Wallonia ,Belgium or tax free art sales for writers, painters all arts inclusive as Ireland is doing.
It would attract cultural dynamism and diversity, two factors that have always made a country stand up and shine, besides it would have no incident on the real estate market for the portuguese people.
By Mika from Lisbon on 23 Nov 2023, 19:54