NHR Is Ending: What It Means for Your Taxes

Non-Habitual Resident (NHR) status gave qualifying individuals a flat 20% tax rate on Portuguese-source income from high-value activities, and full exemption (or reduced rates) on most foreign-source income for 10 years. It was available to new tax residents who hadn't been resident in Portugal for the previous 5 years.

NHR lasts exactly 10 years from the year you first registered. If you registered in 2015, your last NHR year is 2024 (filed in 2025). If you registered in 2016, your last year is 2025 (filed in 2026). Calculate your expiry year: registration year + 9.

After NHR expiry you become a standard Portuguese tax resident. This means: progressive rates (13–48%) on all income instead of a flat 20%; foreign income is no longer exempt — it's included in the taxable base; dividends and interest taxed at 28% (or progressive if you opt for englobamento).

The tax increase depends heavily on your income mix and level. A salaried employee earning €60,000 could see their effective rate jump from ~20% to ~30%+. Foreign income that was exempt under NHR now enters the base and raises the marginal rate. Use the IRS Clarity calculator to model your specific situation with and without NHR.

IFICI (Incentivo Fiscal à Investigação Científica e Inovação) replaced NHR from January 2024. It offers a flat 20% rate on Portuguese-source income for 10 years, but only for qualifying activities: IT, engineering, scientific research, senior management, and other high-value professions listed in the regulation. Unlike NHR, IFICI requires employer certification in most cases.

1. Calculate your tax both with and without NHR using IRS Clarity to understand the impact. 2. Check if your activity qualifies for IFICI — consult a certified TOC (tax accountant). 3. Review your income structure: consider whether foreign income remains in Portugal or gets restructured. 4. Don't wait until the last year — tax planning for post-NHR starts 1–2 years ahead.