&NewLine;<p>The State Finance Act for 2024 has determined the end of the special Non-Habitual Resident regime &lpar;RNH&rpar; on January 1, 2024&period; However&comma; the law provides for a transition period&period; The RNH regime&comma; introduced by Decree-Law no. 249&sol;2009 of September 23, 2009&comma; with the aim of attracting wealthy individuals and highly qualified professionals&comma; has boosted tax competitiveness and attracted foreign investment to Portugal&period;</p>&NewLine;&NewLine;&NewLine;&NewLine;<p>However&comma; considering that the scheme has already produced the desired effects&comma; the government has decided to&rsquo&semi;announce&comma; in October 2023&comma; its termination&comma; then specifying its terms in the new finance law&period;</p>&NewLine;&NewLine;&NewLine;&NewLine;<h2 class="wp-block-heading">What are the RNH mitigation rules?</h2>&NewLine;&NewLine;&NewLine;&NewLine;<p>Among the various changes approved by the <a href="https://vivreauportugalconsulting.com/projet-fiscal-oe2024-portugal/" data-type="post" data-id="11181">finance act</a> 2024&comma; came into force on January 1, 2024&comma; certain mitigation rules for the RNH regime have been determined&comma; with the aim of protecting the cases of taxpayers who&comma; meet the established criteria&comma; wish to settle in Portugal under this special regime from 2024&comma; in particular applicants who &colon;</p>&NewLine;&NewLine;&NewLine;&NewLine;<p>a&rpar; are already registered as RNH in Portugal at the date of entry into force of this &semi;proposal;</p>&NewLine;&NewLine;&NewLine;&NewLine;<p>b&rpar; by December 31, 2023&comma; qualify as residents for tax purposes in Portugal &semi;</p>&NewLine;&NewLine;&NewLine;&NewLine;<p>c&rpar; become resident for tax purposes by December 31, 2024 and declare&comma; for the purposes of their registration as non-habitual residents&comma; that&rsquo&semi;they have one of the following &colon;</p>&NewLine;&NewLine;&NewLine;&NewLine;<ul class="wp-block-list">&NewLine;<li>promise or contract of employment&comma; promise or agreement of secondment concluded until&rsquo&semi;December 31, 2023&comma; whose&rsquo&semi;execution of tasks must take place on national territory &semi;</li>&NewLine;&NewLine;&NewLine;&NewLine;<li>lease contract or other agreement granting the use or possession of real estate on Portuguese territory signed until October 10, 2023 &semi; or</li>&NewLine;&NewLine;&NewLine;&NewLine;<li>reservation contract or preliminary contract for the acquisition of a real property right on Portuguese territory signed until October 10, 2023 &semi;</li>&NewLine;&NewLine;&NewLine;&NewLine;<li>enrolment or registration of dependants in an educational establishment on Portuguese territory before October 10, 2023 &semi;</li>&NewLine;&NewLine;&NewLine;&NewLine;<li>residence visa or residence permit valid until December 31, 2023 &semi;</li>&NewLine;&NewLine;&NewLine;&NewLine;<li>procedure&comma; initiated until December 31, 2023&comma; with a view to the&rsquo&semi;granting of a residence visa or&rsquo&semi;residence permit&comma; before the competent authorities&comma; in accordance with current immigration legislation&comma; in particular by requesting an appointment or an actual appointment to submit the application for a visa or residence permit&semi;</li>&NewLine;</ul>&NewLine;&NewLine;&NewLine;&NewLine;<p>d&rpar; family members of applicants in one of the above-mentioned situations&period;</p>&NewLine;&NewLine;&NewLine;&NewLine;<p>In all cases&comma; the scheme applies for a period of 10 consecutive years and under the terms previously in force&comma; thus maintaining the&rsquo&semi;obligation to apply for registration as an RNH until March 31 of the&rsquo&semi;year following the&rsquo&semi;year of commencement of tax residence&period;</p>&NewLine;&NewLine;&NewLine;&NewLine;<p>Without prejudice&comma; if the&rsquo&semi;registration is made after this deadline&comma; special taxation under the transitional regime takes effect from the&rsquo&semi;year in which the said registration is made and only for the period remaining within the 10-year&period;</p>&NewLine;&NewLine;&NewLine;&NewLine;<h3 class="wp-block-heading">The advantages of the non-habitual resident regime</h3>&NewLine;&NewLine;&NewLine;&NewLine;<p>Similar to what was previously in force&comma; the transition period of the RNH regimemaintains all previous benefits for those registering from 2024 onwards&comma; in particular the exemptions applicable to certain types of income from foreign sources and the special&period&tax rates;</p>&NewLine;&NewLine;&NewLine;&NewLine;<p>More specifically&comma; with regard to income from foreign sources&comma; the non-habitual resident regime allows an exemption from&rsquo&semi;personal income tax for various types of income&comma; including&comma; among others&comma; dividends&comma; interest&comma; rental income and capital gains&comma; provided that&comma; under the applicable double taxation treaty or&comma; in the absence thereof&comma; under the OECD Model Convention&comma; the rights of taxation are allocated to the source&period state;</p>&NewLine;&NewLine;&NewLine;&NewLine;<p>In addition&comma; pensions from&rsquo&semi;a foreign source&comma; when&rsquo&semi;they are received by non-habitual resident&comma; are taxed at a flat rate of 10 &percnt;&comma; even if they are not taxed in the&rsquo&semi;source&period state;</p>&NewLine;&NewLine;&NewLine;&NewLine;<p>On the other hand&comma; income from&rsquo&semi;dependent or self-employed work&comma; when&rsquo&semi;it comes from&rsquo&semi;activities with high added value&comma; of a scientific&comma; artistic or technical nature&comma; included in the officially published list&comma; may benefit from&rsquo&semi;taxation at a special rate of 20 &percnt;&comma; compared to <a href="https://www.portaldasfinancas.gov.pt/at/html/index.html" target="_blank" data-type="link" data-id="https://www.portaldasfinancas.gov.pt/at/html/index.html" rel="noreferrer noopener">progressive taxation</a> under the general scheme&comma; up to 53 &percnt;&period;</p>&NewLine;&NewLine;&NewLine;&NewLine;<p>In practice&comma; and depending on the type and source of income, as well as the rules laid down in each of the double taxation treaties signed by Portugal&comma; the non-habitual resident regime remains very attractive for those who intend to settle in Portugal in 2024&comma; provided that they meet the requirements described above&comma; being a country that offers&comma; in addition&comma; no inheritance or gift tax for spouses&comma; descendants or direct ascendants&comma; as well as&rsquo&semi;a very pleasant Mediterranean climate&period;</p>&NewLine;
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