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The Portuguese government presents its project to reform the status of RNH

A few days ago, we told you about the rumors announced that the Portuguese government was considering a reform of the status of non-habitual residents. This rumor was confirmed yesterday.

The SP has presented a proposal to modify the 2020 budget that foresees the end of the tax exemption for foreign pensioners residing in Portugal. But this only applies to new applicants.

The NHN Reform Project

the socialists want to end the IRS exemption currently enjoyed by foreign pensioners living in Portugal. According to the proposed amendment to the state budget for 2020, presented this Monday by the SP. An IRS rate of 10 % should be applied to these retirees.

For the record, the regime of non-habitual residents (RNH), which was created in 2009 and allows foreign retirees to escape taxation both in their country of origin and in Portugal. The SP has been wanting to end this tax exemption for a few years now by proposing the application of a tax rate of 10 %.

"Non-usual residents of the Portuguese territory will be taxed at a rate of 10 % in relation to the net income of their pensions," reads the proposal presented to the Assembly. Non-usual foreign residents will no longer be exempt from taxes and will pay 10 % of IRS," confirmed Ana Catarina Mendes, during the press conference on Monday afternoon.

Not everyone is affected by HNI reform

The SP, on the other hand, suggests that this rate be applied only to new applicants, i.e. the tax exemption should be maintained for non-habitual residents already registered as such with the tax and customs authorities or whose application has already been submitted.

Foreign residents who will apply until March 31, 2020 or 2021 (this subject is still rather vague), will still be eligible for the respective conditions in 2019 and 2020.

Of course, we will keep you informed of the evolution of this reform of the RNH. There is still time to finalize your decision and benefit from the 10-year tax exemption.

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