Until the entry into force of the State Budget for the year 2024 (Law no. 82/2023, of December 29), paragraphs 10 and 12 of article 72 of the C.I.R.S. had, respectively, the following wording:
“Category A and B net income earned from high value-added activities of a scientific, artistic or technical nature, to be defined in an ordinance issued by the member of the Government responsible for the area of finance, by non-habitual residents in Portuguese territory, shall be taxed at a rate of 20%.”
and
“Non-habitual residents in Portuguese territory shall also be taxed at the rate of 10% on net pension income, including category H income and the income provided for in Article 2(1)(d) and (3) and (11) of Article 2(3)(b), when, according to the criteria provided for in Article 18(1), it is not considered to have been obtained in Portuguese territory, insofar as it does not give rise to a deduction for the purposes of Article 25(2) when it is derived from contributions.”
Until then, article 16 of the C.I.R.S. also provided in paragraphs 8 to 10 that
“Non-habitual residents in Portuguese territory are considered to be taxpayers who, having become resident for tax purposes under the terms of paragraphs 1 or 2, have not been resident in Portuguese territory in any of the previous five years.”
Once these conditions have been met, the taxpayer acquires the right to be taxed as a non-habitual resident for a period of 10 consecutive years from the year in which he is registered as a resident, as long as he registers with the Tax Authority, namely through the Finance Portal, up to and including March 31 of the year following that in which he becomes a resident (paragraphs 9 and 10 of article 16 of the CIRS).
All this, as duly explained in the text published and accessible via the link https://www.tofadvogados.com/post/regime-jurídico-do-residente-não-habitual-e-o-prazo-que-finda-a-31-de-março.
Now,
With the entry into force of the State Budget for 2024, the aforementioned paragraphs 8 to 12 of article 16 and paragraphs 10 and 12 of article 72, both of the CIRS, were also repealed, in accordance with paragraph b) of article 317 of the State Budget for 2024.
Nevertheless,
The legislator did not terminate this tax benefit in one fell swoop, but approved a transitional regime.
As such,
Article 236(3)(a) of the SB 2024 states that
“The provisions of Article 16(8) to (12), Article 22, Article 72(10) and (12), Article 81(4) to (8), Article 99(8) and Article 101(1)(d) of the Personal Income Tax Code, in the wording prior to that introduced by this law, shall continue to apply until the end of the period provided for in Article 16(9) of the Personal Income Tax Code, in the wording prior to that introduced by this law. º of the IRS Code, in the wording prior to that introduced by this law, counted from the date on which the taxpayer became resident in Portuguese territory, to taxpayers who (...) On the date of entry into force of this law, are already registered as non-habitual residents in the AT taxpayer register, as long as the period referred to in paragraphs 9 to 12 of article 16 of the IRS Code has not been exhausted”,
thus safeguarding the rights acquired until then by those (already) resident in Portugal.
In turn, subparagraphs b) to d) of the aforementioned paragraph 3 state that the regime will apply to those who,
“
b) on December 31, 2023, meets the conditions of article 16 of the IRS Code to qualify as a resident for tax purposes in Portuguese territory;
c) becomes resident for tax purposes by December 31, 2024 and declares, for the purposes of their registration as a non-habitual resident, that they have one of the following elements:
i) Promise or contract of employment, promise or secondment agreement entered into by December 31, 2023, the performance of whose duties is to take place in Portuguese territory;
iii) Lease agreement or other agreement granting the use or possession of real estate in Portuguese territory signed by October 10, 2023;
iii) Reservation contract or promissory contract for the acquisition of a right in rem over real estate in Portuguese territory signed before October 10, 2023;
iv) Enrollment or registration for dependents in an educational establishment domiciled in Portuguese territory, completed by October 10, 2023;
v) Residence visa or residence permit valid until December 31, 2023;
vi) Procedure, initiated until December 31, 2023, for the granting of a residence visa or residence permit, with the competent authorities, in accordance with the legislation in force applicable to immigration matters, namely through the request for an appointment or effective appointment for the submission of the application for the granting of a residence visa or residence permit or, also, through the submission of the application for the granting of a residence visa or residence permit;
d) is a member of the household of the taxable persons referred to in the previous paragraphs.”
In this way, anyone who has taken steps to establish residence in Portugal at an earlier date, i.e. during the year 2023, under the terms of Article 236(3)(c), can still benefit from the Non-Habitual Resident regime.
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