Non-habitual resident (RNH)
Thinking of leaving Brazil through investment or business? As a Non-habitual Resident, this is possible
The Investment Fiscal Code, approved by Decree-Law n. 249/2009, from september 23rd, created the fiscal regime for non-habitual residents (NHR) based on “Imposto Sobre o Rendimento das Pessoas Singulares (IRS)”, an individual taxing method. Its purpose is to attract highly qualified professionals who are non-habitual residents that may add to the country’s intellectual or industrial property and know-how.
It’s a special fiscal regime, valid for 10 consecutive years, that allows physical persons who become fiscal residents in Portugal to benefit from a much more attractive fiscal regime.
How does the fiscal regime for NHR work?
The NHR applies for 10 years to physical people who will benefit from a special fiscal regime, sheltered by the IRS, in which their income will be exempt or less taxed.
What are the conditions to benefit from NHR?
Not have been a fiscal resident in Portugal for the last 5 years.
What does become a fiscal resident in Portugal imply:
Spend +183 continuous or interpolated days in Portugal every 12 months, OR
Spending less time in the country, but having a residence in Portugal during the mentioned period.
Present the NHR period until march 31st of the following year of the arrival.
Does the NHR imply that a physical person must live in Portugal for, at least, 183 days a year?
Changing one’s fiscal residence means, by rule, that the person must spend at least 183 continuous or interpolated days living in the State, every 12 months. However, even spending less than the predetermined period, the State may continue to consider the person as their fiscal resident due to the intensity of personal or professional bonds they maintain with the country.
As to domestic rules of both states (such as Brazil and Portugal), a physical person who is considered by both as their fiscal resident may lead to a phenomenon called double fiscal residency, which must be solved to avoid double tribulation, determining which residency prevails.
Therefore, the matter of the 183 days spent in Portugal each year must be seen, above all, from the persons’ original State’s perspective, like Brazil, and the capacity of such person to make sure their country of origin gives up on treating them as a fiscal resident.
The success of “cutting relations” with the origin State doesn’t mean, however, that the person is free to spend short periods in Portugal. Such behaviors, when artificial, may constitute fiscal fraud.
What rights does a non-habitual resident citizen have?
The citizen who is considered a non-habitual resident acquires the right of being taxed as such in a 10-year consecutive period starting from the year of their inscription as a Portuguese resident.
The 10-year period isn’t extendable
It is important to know that, to continue to be taxed as an NHR citizen during the 10 years, one must be, every year, considered a resident in Portuguese territory.
In the cases in which the citizen has not benefited from being taxed according to the fiscal regime established for NHR citizens in one or more of the years of the 10 years, they can regain the benefit of the same right in any of the remanent years from that period, as long as they go back to being considered a resident for IRS purposes.
