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Some basic principles of NHR

As it’s reporting season, a lot of questions recently on NHR and how is it applied to different types of income. 

Trying to summarise the core principles of NHR:- If you live in Portugal and work from Portugal, Portugal wants you to pay tax in Portugal. 

- If you live in Portugal but work overseas (when you actually go there and work from an office), Portugal normally won’t tax you, but you need to say that on your tax return. 

- If you have income from investments / business profits overseas, Portugal normally won’t tax you unless it’s pension and you applied to NHR recently and then it’s 10%. 

- If you are American, the US always wants to tax you (but often grants an exemption), which means Portugal may not. 

- If you classify work income (normally pay tax in Portugal) as foreign profits (normally doesn’t pay) by channelling income via an overseas company, Portugal can try to treat the company as registered in Portugal.  

You will hear different things from different people but in reality there simply are a lot of grey areas.

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