Portugal’s original Non-Habitual Resident regime closed to new applicants on 1 January 2024, following the 2024 State Budget Law. A transitional window remained open until 31 March 2025 for those who met specific conditions set before the closure.
If you are considering a move to Portugal now, the regime that may apply to you is IFICI, the Tax Incentive for Scientific Research and Innovation, also known as NHR 2.0, which took effect on the same date, 1 January 2024.
IFICI offers a flat 20 percent tax rate on eligible Portuguese-source income for qualifying new residents, along with exemptions on much of your foreign-source income, for a period of up to ten years.
It does not extend the same treatment to everyone the original regime once covered. Retirees and those relying primarily on passive income no longer receive the tax benefits associated with the old NHR regime.
The original NHR program was introduced in 2009 to attract foreign residents to Portugal through reduced tax rates and exemptions on qualifying income. Over its lifetime, it became one of the most widely used residency-linked tax regimes in Europe.
Its replacement reflects a narrower policy focus. Where NHR was broadly accessible to a wide range of newcomers, IFICI is directed at professionals working in specific high-value sectors, and it requires you to meet defined academic and professional criteria to qualify.
NHR Portugal Tax Regime: Key Takeaways
What is the NHR Portugal tax regime?
The NHR Portugal tax regime refers to the Non-Habitual Resident program that Portugal introduced in 2009 and closed to new applicants on 1 January 2024, following a transitional period that ended on 31 March 2025. Qualifying residents received reduced tax rates and exemptions on a broad range of income for up to ten years.
The regime applied a flat 20% rate to certain Portuguese-source income earned in designated high-value professions and, in many cases, exempted foreign-source income from Portuguese tax entirely, depending on the terms of Portugal’s double taxation agreements with the relevant country.
Its reach extended to retirees, investors, and a wide range of professional categories, which is part of why it became one of the most widely used residency-linked tax incentives in Europe.
The Incentivo Fiscal à Investigação Científica e Inovação, or IFICI, works differently. It preserves the flat 20% rate on eligible Portuguese-source income, but restricts eligibility to specific professional activities in sectors Portugal has identified as strategic, including scientific research, technology, and related high-value fields.
Qualifying also requires meeting a defined academic or professional threshold: Either an EQF Level 6 qualification, broadly equivalent to a bachelor’s degree, combined with three years of relevant professional experience, or an EQF Level 8 qualification, meaning a PhD, which removes the experience requirement.
The Portuguese Tax Authority decides who qualifies. It assesses your prior residency, your activity, and your qualification, and you can’t hold IFICI if you’ve already held NHR status.
Is the NHR Portugal tax regime still available?
No. The original NHR regime closed to new applicants on 1 January 2024 under the 2024 State Budget Law, with a transitional window for people who already met specific conditions before that date. That window closed on 31 March 2025, which was the final deadline to register.
If you didn’t qualify and register within that window, you can’t access the original regime now, no matter when you plan to move to Portugal.
| Regime | Current status |
|---|---|
| Original NHR | Closed to new applicants since 1 January 2024 |
| IFICI (NHR 2.0) | Open since 1 January 2024 for residents in qualifying professional activities |
| Standard progressive IRS | Applies automatically if you hold NHR status from before closure or do not qualify for IFICI |
For new residents, IFICI has taken the place of NHR, though its scope is narrower. The Portuguese Tax Authority processes IFICI registrations and confirms whether your activity qualifies.
IFICI isn’t a direct substitute. Access runs through a qualifying professional activity, so if you plan to live in Portugal on a pension or on investment income and you aren’t working in a recognized activity, you can’t claim it at all, and your income is taxed at standard progressive rates.
Foreign pension income sits outside the regime even for people who do qualify. It’s taxed at standard progressive rates, while most other foreign income, including dividends, interest, rental income, and capital gains, is exempt. Income paid from a jurisdiction on Portugal’s list of clearly more favorable tax regimes is taxed at 35%.
Benefits of Portugal NHR
The benefits in this section are historical. They applied to the original NHR regime and differ from what IFICI offers.
If you already hold NHR status, they continue to apply for the remainder of your ten-year period. If you’re arriving in Portugal now, they don’t apply to you at all.
| Benefit | What it meant |
|---|---|
| Ten-year special tax treatment | Reduced rates and exemptions applied for a fixed ten-year period from the date NHR status was granted. |
| Exemption on most foreign-source income | Income from outside Portugal was often exempt from Portuguese tax under the terms of the relevant double taxation agreement. |
| 20 percent flat rate on qualifying Portuguese-source income | This applied specifically to income from the high-value professions recognized by the regime. |
| Inheritance and gift tax exemption for direct family members | Transfers to a spouse, children, or parents, were exempt a feature of the broader Portuguese tax environment rather than unique to NHR. |
| No wealth tax | Portugal does not levy a general wealth tax on NHR holders or other residents. |
| Free remittance of funds | NHR holders could transfer funds into Portugal without additional remittance-based tax. |
Portugal’s double taxation agreements determined much of the outcome under NHR. The country has agreements in force with more than 80 countries, and each one sets out which of the two countries can tax a given category of income.
Under NHR, Portugal exempted most foreign-source income where the agreement gave the other country the right to tax it. That right didn’t have to be exercised. If the source country chose not to tax the income, it could end up taxed at a low rate or not at all.
NHR, IFICI, and Standard IRS: How They Compare
NHR no longer exists, but you’ll still need to know which of the three applies to you. The table compares the original NHR regime, the current IFICI regime, and standard Portuguese income tax on the same basis.
| NHR (closed) | IFICI (current) | Standard IRS | |
|---|---|---|---|
| Availability | Closed to new applicants since 31 March 2025 | Open to new tax residents who meet eligibility criteria | Applies to all Portuguese tax residents by default |
| Eligibility basis | Five-year non-residency requirement broad professional scope | EQF Level 6 with three years of experience or EQF Level 8 plus a qualifying activity in a recognized sector | No eligibility criteria; applies automatically |
| Duration | Ten years from the date the status was granted | Up to ten years, reassessed annually conditional on you continuing to work in a qualifying role | Ongoing for as long as you remain a tax resident |
| Portuguese-source income (qualifying activity) | Flat 20 percent for recognized high-value professions | Flat 20 percent for recognized activities | Progressive rates from 12.5 percent to 48 percent |
| Foreign-source income | Often exempt where a double taxation agreement applied | Most foreign income, such as employment, and self-employment, dividends, interest, and capital gains is exempt. | Taxed at standard progressive rates with relief available under applicable double taxation agreements. |
| Pension income | Flat 10 percent | Not eligible | Taxed at standard progressive rates with the first €4,104 exempt |
| Application deadline | Closed | 15 January of the year following your first year of Portuguese tax residency | Not applicable |
Standard IRS rates for Portuguese tax residents
If your income doesn’t fall under IFICI or a recognized qualifying activity, it’s taxed under Portugal’s standard progressive income tax system, known as IRS. This applies to most residents, and it’s what IFICI’s flat 20% rate is measured against.
Portugal updated its IRS brackets for 2026, raising the threshold of each band and reducing the marginal rate on the second through fifth brackets, so these figures reflect the current year and not the previous one.
| Taxable income | Rate | Deduction |
|---|---|---|
| up to €8,342 | 12.50% | €0.00 |
| €8,342.01-€12,587 | 15.70% | €266.94 |
| €12,587.01-€17,838 | 21.20% | €959.26 |
| €17,838.01-€23,089 | 24.10% | €1,476.45 |
| €23,089.01-€29,397 | 31.10% | €3,092.77 |
| €29,397.01-€43,090 | 34.90% | €4,209.94 |
| €43,090.01-€46,566 | 43.10% | €7,743.27 |
| €46,566.01-€86,634 | 44.60% | €8,441.48 |
| Above €86,634.00 | 48% | €11,387.17 |
A reduction in the rates for the first six brackets was approved by the Council of Ministers on 17 September 2026 and is now before parliament, with proposed retroactive effect to January 2026. Until it passes, the rates in the table apply.
Residents with taxable income above €80,000 are also subject to an additional solidarity surcharge, at 2.5% on income between €80,000 and €250,000, and 5% above that threshold.
This applies regardless of whether you hold IFICI status, since the surcharge sits outside the flat rate and affects only income that falls under standard progressive taxation.
Who can apply for the NHR Portugal tax regime?
Nobody can apply for the original NHR regime. It closed to new applicants on 1 January 2024, and the last date to register under the transitional rules was 31 March 2025. The rules in this section apply only if you’re checking whether an existing status or an old application still stands.
Two groups could register under the transitional rules.
If you were already a Portuguese tax resident on 31 December 2023, you could register by 31 March 2024, with effect from 2023.
If you became a Portuguese tax resident during 2024, you could register by 31 March 2025, provided you held one of six pieces of evidence dated before the regime closed.
Dated by 31 December 2023:
- An employment contract, promise of employment, or secondment agreement covering work in Portugal
- A residence visa or residence permit valid on that date
- A residence visa or permit application already submitted, or an appointment requested
Dated by 10 October 2023:
- A lease or other contract giving you use of a property in Portugal
- A reservation contract or promissory purchase agreement for a Portuguese property
- Enrolment of a dependent child in a Portuguese school
Family members of anyone in either group could register on the same basis. In all cases, you couldn’t have been a Portuguese tax resident in the five years before applying.
To apply for IFICI, you need to meet an academic or professional threshold before anything else is considered.
This means holding an EQF Level 6 qualification, broadly equivalent to a bachelor’s degree, combined with three years of relevant professional experience, or an EQF Level 8 qualification, which removes the experience requirement.
| Recognized activity category | Who this applies to |
|---|---|
| Teaching and scientific research | Higher education teaching staff and scientific researchers |
| Highly qualified professionals | Individuals in qualified positions as defined under the tax code, and members of corporate bodies within contractual benefits for productive investment |
| Employees of recognized strategic companies | Staff at companies recognized by AICEP, IAPMEI, or similar bodies as relevant to the national economy |
| Research and development personnel | Individuals meeting the tax code’s R&D definitions |
| Certified startup employees | Staff at businesses certified by law as startups |
| Madeira and Azores workers | Individuals meeting the specific terms set by those regions |
You must also not have been a Portuguese tax resident in the previous five years, and you must earn income from one of the regime’s recognized activities.
Tax Under the Non-Habitual Resident Regime in Portugal
This section covers the tax treatment under the original NHR regime. It applies to you only if you already hold NHR status, in which case these are the rules that govern your remaining years. It doesn’t apply to anyone arriving in Portugal now.
Tax treatment of foreign-source income under the original NHR regime
Under the original NHR regime, foreign-source income was largely exempt from Portuguese taxation where a double taxation agreement gave the other country the right to tax it.
| Income type | Treatment under NHR |
|---|---|
| Employment income | Taxed at a flat 20 percent if it fell under a recognized high-value profession |
| Self-employment income | Taxed at a flat 20 percent if it fell under a recognized high-value profession; also subject to social security contributions after an initial one-year exemption |
| Royalties dividends and interest | Typically exempt where a double taxation agreement applied; taxed at 28 percent where no exemption applied, or 35 percent if the income originated in a blacklisted jurisdiction |
| Real estate income | Typically taxed at source in the country where the property is located |
| Capital gains from securities | Taxed at 28 percent |
| Pension income | Taxed at a flat 10, percent a rate in effect since March 2020 |
Tax treatment of Portugal-source income under the original NHR regime
Income earned within Portugal under the original NHR regime followed a different set of rules from foreign-source income.
Employment and self-employment income was taxed at standard progressive rates unless it fell under a recognized high-value profession, in which case the flat 20 percent rate applied. Rental income, capital gains, and pension income each followed its own treatment, set out below.
| Income type | Treatment under NHR |
|---|---|
| Employment and self-employment income | Standard progressive rates applied unless the activity fell under a recognized high-value profession in which case a flat 20 percent applied |
| Rental income | Taxed at an optional 28 percent or at standard progressive rates |
| Net capital gains | Fifty percent of the gain was subject to standard progressive rates |
| Pension income | Taxed at the standard 10 percent rate |
The professions the original regime recognized as high-value included:
- general directors and executive managers,
- directors of administrative, commercial, and specialized services,
- specialists in physical sciences, mathematics, and engineering,
- university and higher education professors,
- information and communication technology specialists,
- authors, journalists, and linguists,
- performing and creative arts professionals,
- science and engineering technicians,
- market-oriented agricultural and forestry workers,
- and skilled industrial and craft workers meeting a minimum qualification or five years of professional experience.
How to Apply for IFICI
Applying for IFICI starts with becoming a Portuguese tax resident. You do that by spending more than 183 days in Portugal within a 12-month period, or by keeping a habitual residence there that shows you intend to stay. The application itself then has to reach the Portal das Finanças by 15 January of the year after you became resident.
Step 1: Become a Portuguese tax resident by spending more than 183 days in Portugal within a 12-month period, or maintain a habitual residence in Portugal that shows intent to stay long-term.
Step 2: Register with the Portuguese Tax Authorities (AT).
Step 3: Obtain a tax identification number in Portugal (NIF).
Step 4: Update your tax address to your Portuguese residence.
Step 5: Once you’re a resident, registered, and have an NIF, submit a formal request through the Portal das Finanças (Portugal’s tax portal).
Miss the 15 January deadline and you can still apply, but the benefit runs from the year you file instead of the year you became resident, so you lose the years in between.
IFICI approval isn’t a one-time event. Your eligibility is reassessed every year you hold the status, so the qualifying activity behind your original application has to stay in place. If it ends, you have six months to start a new qualifying activity, and you then register again by 15 January of the year following the change.
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