The Non-Habitual Resident (NHR) regime in Portugal has become an increasingly popular option for individuals looking to take advantage of Portugal’s favorable tax laws.
One aspect of the NHR application process is the status update that occurs on the Portuguese Financials website.
After submitting a NHR application, it is normal to experience some confusion regarding the status update, as the terminology used on the website may be unfamiliar.
One common misunderstanding is the meaning of the status “Deferido.”
This status indicates that the NHR status has been approved and the individual is now eligible for tax-deferred status.
This means that taxes on the individual’s income will be deferred for a specified period of time. The start and end years for the tax deferral will be listed on the website and in your pesonal “Residente Não Habitual” form.
What “Deferido” actually means?
Another common question is what tax-deferred actually means. In the context of the NHR regime, tax-deferred means that the individual’s taxes will be postponed until a later date which is 10 years from the date of application approval.
If the status were to be “Indeferido,” it would indicate a negative decision on the NHR application.
Other common myths
Another common misconception is whether or not individuals need to provide documentation in order to qualify for the 20% tax rate for high-value professions.
While having an approved NHR status does not guarantee the 20% tax rate, the individual must still enter the profession code into their tax return when filing taxes. Supporting documentation, such as a work contract, must be kept on hand in case the individual is audited by the Financials department.
In conclusion, the NHR regime in Portugal offers numerous benefits to individuals seeking tax advantages. Understanding the status updates on the Portuguese Financials website, as well as the eligibility criteria for the 20% tax rate, will help individuals make informed decisions when applying for the NHR regime.