RNH: Transition period, how does it work?

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