Portugal: Special tax regime for inbound employees

January 3, 2010

Portugal has recently introduced a new regime, effective
retrospectively from 1 January 2009, which affords beneficial tax
treatment for qualifying income arising from a Portuguese source for
non-habitual residents (see below for an explanation of this term),
arriving in Portugal during 2009 or thereafter

The regime was published in September 2009 but is effective from 1
January 2009.  Employment income and self-employment income arising from
a Portuguese source, which qualifies under the conditions of the
regime, will be taxed at a flat rate of 20%. In certain circumstances,
foreign income can also benefit from this special regime if the income
is not exempt in Portugal under the provisions of a double tax

Non-habitual residents

Non-habitual residents are individuals who arrived in Portugal and
became resident in Portugal for tax purposes (“tax resident”) at any
time during or after 2009 but who have not been tax resident in Portugal
in the preceding five years. To benefit from this regime, an individual
must be registered with the Portuguese tax authorities as a
non-habitual resident. Once registered, the special non-habitual
resident status applies for a period of 10 years, provided the
individual remains a tax resident of Portugal and elects to be taxed as
non-habitual resident.


Individuals who arrived in Portugal during 2009 or who may go to
Portugal in 2010 or later and who wish to benefit from the advantageous
tax treatment afforded under the regime should register with the
Portuguese tax authorities to obtain non-habitual resident status.

Decree 249/2009 in Portuguese:  Decreto-Lei n.º 249/2009

For further information, please contact Bina Gayadien (bina.gayadien@abbisscadres.com)
or Guy Abbiss (guy.abbiss@abbisscadres.com)
on +44 (0) 203 051 5711.


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