The NHR Tax Regime is applicable to any foreigner who, not having been a resident in Portugal for tax purposes in the previous 5 (five) years, wishes to have his income taxed this way for 10 (ten) consecutive years.
In each of those 10 (ten) years of taxation, such person must meet one of the following conditions:
A) Having stayed in Portugal for at least 183 days, consecutive or not;
B) Have a property/house, by the 31st of December, in conditions such that permanent residency is presumed;
C) Having a parent that resides in Portugal.
To be eligible for such taxation method, one must present its application until the 31st of March of the year following the tax year that is meant to have such method applied. The Portuguese State shall then authorize the application of the NHR Tax Regime.
After being considered a NHR under the terms above, taxation for 10 (ten) years begins in the following way:
Regarding retirement pensions (which belong to category H) received from abroad, should they be paid by a country with an Agreement To Avoid Double Taxation (ATADT), these are exempt from taxation, being such exemption not limited in time.
Although exempt from taxation, such income will be considered in order to determine the applicable tax rate to other income, should there be any other.
Should there be any other income with origin in Portugal, taxation will be at a fix rate of 20% over all income for the next 10 (ten) years – in the year of 2014, and extra 3,5% are charged due to the State Budget, whilst, if the only income is a pension, there will be no taxation at all.