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Portugal’s NHR programme is an important but often misunderstood benefit for those in need. It has been subject to much debate, with questions about its legitimacy and value.

In this blog article, we will be exploring the NHR programme; understanding its legitimacy, what it actually is and examining its many benefits.

We will cover a range of topics such as eligibility criteria, and how it can help those in need. With this in-depth look at the NHR programme, you will come away with a better understanding of its legitimacy and the advantages it offers.

NHR programme

 

What is the Non-Habitual Residency?

In 2009, Portugal implemented the Non-Habitual Residency (NHR) programme. It’s aim was to invite foreign retirees, professionals, and individuals to reside and work in the nation. This tax regime was implemented to drive investment and spur economic activity. As a result, the NHR has become a much sought-after option for expats moving to Portugal. Are you wanting to benefit from the country’s favourable tax rates and moderate climate?

The programme offers several benefits to non-habitual residents, such as tax exemptions and reductions on their foreign income, capital gains, and inheritance. Additionally, they are only taxed on the income generated within Portugal at a flat rate of 20%. These incentives make Portugal an attractive destination for foreigners looking for a low-tax environment.

However, it is important to note that the NHR programme is not a one-size-fits-all solution, and each case must be evaluated individually. The benefits and eligibility requirements vary depending on the applicant’s specific situation, including their nationality, profession, income source, and tax residence status.

Common misconceptions about the NHR programme

Although the NHR regime has been in place for some time, there remain numerous misunderstandings surrounding it. Let’s take a closer look at some of these misconceptions:

It’s a tax avoidance scheme

Many people believe that the NHR programme is a way for expats to avoid paying taxes in their home country. However, this is far from the truth. The programme simply offers a tax break to people who choose to live in Portugal for a certain amount of time.

It’s only for the rich

Another common misconception about the NHR programme is that it’s only available to wealthy individuals. This is not entirely accurate. While it’s true you need to be earning to be eligible for the NHR, it isn’t only for the wealthy or ultra-rich. As long as you have an income in another country, you can make use of the NHR.

It’s too complicated

It can be daunting for some to go through the NHR application process. However, we believe this is due to all the myths and misconceptions. Fortunately, if you find the right experts to guide you through the process, you’ll find out just how uncomplicated the NHR is. With the help of a tax consultant, the process can be straightforward and hassle-free.

It’s only for retirees

It’s true that the NHR programme is popular among retirees, who often choose to spend their golden years in Portugal. However, the programme is also available to people who are still working or starting a business.

To sum up, the Portuguese government has an authentic program known as NHR. It is neither a way to evade taxes, exclusive to the wealthy or older individuals, nor a complex process. With the help of a tax consultant, anyone who meets the eligibility requirements can benefit from the programme.

 

The legitimacy of the NHR programme

There have been concerns over the legitimacy of the NHR programme, with many calling it a scheme. However, it is important to note that the NHR programme is a legitimate government benefit available to those who meet the requirements.

The NHR programme offers tax benefits to individuals who become tax residents in Portugal. The tax benefits include a flat income tax rate of 20% on eligible income, exemption from taxes on foreign income and gifts and inheritances, and exemption from wealth tax. These benefits are legitimate and are outlined in the Portuguese tax code.

Furthermore, the NHR programme is compliant with European Union laws and regulations. The programme has been reviewed and approved by the European Commission and is in line with the EU state aid rules. This means that the programme does not give an unfair advantage to individuals and does not constitute illegal state aid.

In summary, the NHR programme is a legitimate government benefit available to those who meet the requirements. The tax benefits offered by the programme are in line with the Portuguese tax code and compliant with EU laws and regulations. The programme is not a scheme or illegal state aid.

Benefits of the NHR programme

Now we have addressed the legitimacy (and some benefits) of the NHR programme; let’s talk about a few more benefits it offers to those who apply for it.

Another advantage of the NHR programme is the flexibility it provides. Once non-habitual resident status is granted to you, you can come and go from Portugal freely and without any worry of forfeiting the advantages associated with it.

he NHR offers attractive opportunities for businesses. By providing a friendly and beneficial tax regime, it becomes a lot easier for entrepreneurs, business owners and freelancers to become successful and reduce their tax burdens both in Portugal and in their country of residence.

Finally, the NHR programme is also ideal for those who are planning their retirement. As a non-habitual resident, you will have access to the Portuguese healthcare system and the chance to take advantage of various discounts.

Requirements to apply for the NHR programme

Are you interested in applying for the NHR programme? Well, let’s talk about the requirements to apply.

Firstly, it’s important to note that the NHR programme is available to both EU and non-EU residents. This makes it an attractive option for a diverse range of people. In order to be accepted into the program, several conditions must be fulfilled.

The main requirement is that applicants must be a tax resident in Portugal. The Non-Habitual Resident Programme has been created to entice new residents to Portugal. This means applicants should not have been a tax resident in Portugal in the previous five years. Rather than benefit those who are already living and working in the country.

While it is not mandatory that applicants engage in a “high value-added”, there are some added benefits. High-value activities include working within professional settings such as science, culture, technology, finance and more.

Other requirements include having a clean criminal record and being able to demonstrate sufficient financial means to support yourself while living in Portugal.

Overall, the NHR programme offers a unique opportunity for individuals to enjoy a favourable tax regime. By meeting the requirements and taking advantage of the benefits, many people have been able to enjoy a higher quality of life. While also finding greater financial stability in this beautiful country.

Speak to an expert

When researching programmes like the NHR online it is easy to come across some false information. However, we hope that after reading this article you are more certain that the NHR is a legitimate programme. Do you still have some more question for the experts on Portuguese personal taxes? Why not fill out our quick and easy form. From there we will get back to you and help you start saving!

By taking advantage of the NHR programme, individuals can save money on taxes and live comfortably in Portugal. It is important to note that the programme has strict requirements. But, for those who meet them, it is a great opportunity.

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