Benefits & Eligibility

Benefits

Since the 1st of January 2013, foreign sourced pension income, even if has not been taxed in the country of origin (most cases), received in Portugal by individuals who qualify for the status of non habitual resident, are totally exempted from tax (0%). Other foreign sourced income will also be exempt in Portugal and locally generated income, will be in most cases taxed at a flat rate of 20%;

The retired foreign citizen that successfully applies to this status benefits from the foreign sourced personal income 0% tax and reduced tax from Portuguese generated income for 10 (ten) years.

Example 1

For a retired with an average UK earning of £26.500, savings are:

Basic rate: 0,20 x £26.500 = £5300/year.

Example 2

For a retired with an average UK earning of £80,000/year savings are:

Basic rate: 0,20 x £31.865 = £6373/year

Higher rate: 0,40 x £48.315 = £19.326/year.

Total savings are £25.699/year

Example 3

For a retired with an average UK earning of £200,000/year savings are:

Basic rate: 0,20 x £31.865 = £6373/year

Higher rate: 0,40 x £118.135 = £47.254/year

Additional rate: 0,45 x £50.000 = £22.500/year

Total savings are £76.127/year

Only with these savings, you can rent a luxury house in a fancy place. You will be also saving in the daily expenses because life cost in Portugal is one thirth of UK.

Who can apply

Having not been a resident in Portugal for the last 5 years;

Register at the local tax office as a tax resident in Portugal (to do so you must have remained in Portugal for more than 183 consecutive or non-consecutive days, or having remained for less time, having, at 31st December of that year, a home in such conditions that would lead to the assumption that it is intended to be kept and occupied as your habitual residence);

Request that the status of Non-Habitual Resident be attributed at the time of registering as a tax resident in Portugal, or by 31st March of the year following that in which you become a resident in Portugal.

 

 

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