# NHR scheme in Portugal and risk that request will not be approved



## ZHLB85 (6 mo ago)

Hi all

I am an EU citizen, currently leaving in a non EU country and I was thinking to move to Portugal and apply for the NHR scheme. Reading around in various forums on the subject, I see that one requirement to apply for the NHR is to be tax resident in Portugal. Is this is a formality or really requires people to leave their country, move to Portugal, apply for NHR and then also risk that it will not be approved? In my case for example, if I leave my country for more than 183 days I automatically lose my residence permit / visa. My question is : is there a way (before moving to Portugal) to know before if my request will accepted? or I have to take the risk to relocate first, and then be said sorry but you are not eligible for NHR, in this case I would also lose residence in the country where I live?

It would be useful to your toughts and experiences from people who have been in a similar situation. Thanks


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## proud.to.be.EUROPEAN (Feb 14, 2020)

A bit confusing post.
Tax residence and immigration residence are completelty different matters and have different rules.
NHR rules are clear and simple, you would only not qualify if you have been tax resident in PT in last 5 years.

Tax residence of your other country is subjet to its own laws, not PT NHR laws. I.e. if you have USA citizenship, you are always liable for USA taxes, no matter where you live of how long. Also, Sweden doesnt recognise NHR status. You need to read up tax laws of your current resident state or get tax accountant.


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## ZHLB85 (6 mo ago)

proud.to.be.EUROPEAN said:


> A bit confusing post.
> Tax residence and immigration residence are completelty different matters and have different rules.
> NHR rules are clear and simple, you would only not qualify if you have been tax resident in PT in last 5 years.
> 
> Tax residence of your other country is subjet to its own laws, not PT NHR laws. I.e. if you have USA citizenship, you are always liable for USA taxes, no matter where you live of how long. Also, Sweden doesnt recognise NHR status. You need to read up tax laws of your current resident state or get tax accountant.


Ok this adds some clarity but I am still confused on the list of high added value activities.
I never lived in Portugal in my entire life, then next year I move to Portugal, I qualify automatically for NHR but what I do professionally is not considered by Portuguese authorities to fall in the "high added value activies" category. Basically yes, I get the NHR status but I will end up paying the same high taxes. What is the point of moving to Portugal then if I have to end up 48% taxes of my income?


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## hktoportugal (Feb 25, 2019)

Not quite sure what the confusion is but maybe I misunderstand. 

NHR, for people that are still working, is specifically meant for folks that have a "high value profession" as those are the people that the Portuguese government would like to see migrating to Portugal. If you are working and you don´t have a "high value profession" as defined in the list then your taxation on the income component will be as per regular taxation in Portugal. You may still benefit if you, for instance, retire after 5 years in Portugal as the NHR status is valid for 10 years. Or if you receive real estate Income, dividends, interests, royalties and capital gains that, under a Double Tax Agreement rules of OECD Model Convention rules, can be potentially taxed in the country of source. Since you can only apply for NHR if you have not been tax resident in Portugal in the previous 5 years this basically means you have to apply when you become a tax resident.

So yeah, NHR is not meant to attract everyone that is working, only those with what the government defined as "high value professions". For anyone else taxation is as per usual. The NHR is not meant as a "free for all".


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## ZHLB85 (6 mo ago)

hktoportugal said:


> Not quite sure what the confusion is but maybe I misunderstand.
> 
> NHR, for people that are still working, is specifically meant for folks that have a "high value profession" as those are the people that the Portuguese government would like to see migrating to Portugal. If you are working and you don´t have a "high value profession" as defined in the list then your taxation on the income component will be as per regular taxation in Portugal. You may still benefit if you, for instance, retire after 5 years in Portugal as the NHR status is valid for 10 years. Or if you receive real estate Income, dividends, interests, royalties and capital gains that, under a Double Tax Agreement rules of OECD Model Convention rules, can be potentially taxed in the country of source. Since you can only apply for NHR if you have not been tax resident in Portugal in the previous 5 years this basically means you have to apply when you become a tax resident.
> 
> So yeah, NHR is not meant to attract everyone that is working, only those with what the government defined as "high value professions". For anyone else taxation is as per usual. The NHR is not meant as a "free for all".


The list of the government on skill professions is not very detailed at all. Too much risk to relocate to the country for nothing and then end paying 48% tax on income rather than 20% (which is already extremely high).


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## hktoportugal (Feb 25, 2019)

Sure, compared to Switzerland, which is considered a tax haven for individuals and cooperations, 20% is high. For most of the rest of the world it is extremely low. 

Granted, in Hong Kong, where I was previously stationed, taxation was also much lower than Portugal (as I also need to pay 11% social security here) besides the 20% IRS. (In Hong Kong I never paid more then a compounded 15%). 

But I can assure you that I can save a lot more here than I did in Hong Kong and enjoy a much better way of life with wonderful people, weather and food. That would even more so be the case when you compare cost of living Switzerland versus Portugal as Switzerland is even more expensive than Hong Kong (except possibly for rent which is ridiculous in Hong Kong). My guess it is at least twice as cheap here compared to CH, for eating out probably 3 to 4 times cheaper... Lunch here with two people .... I never pay more than 20 Euro. The most I paid here for a dinner at a high end restaurant with plates of fresh seafood, a massive crab, starters , deserts, coffee and a few bottles of wine with four people was 140 Euro. 

Anyways, I would never move just for the sake of taxation. If you are looking for that I would recommend moving to Dubai. As to the vagueness of the list .... there are some pretty good firms here in Portugal who can advise you if you are unsure on whether you qualify, my experience is that it is vague for a reason (i.e. easy to qualify)


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## ZHLB85 (6 mo ago)

hktoportugal said:


> Sure, compared to Switzerland, which is considered a tax haven for individuals and cooperations, 20% is high. For most of the rest of the world it is extremely low.
> 
> Granted, in Hong Kong, where I was previously stationed, taxation was also much lower than Portugal (as I also need to pay 11% social security here) besides the 20% IRS. (In Hong Kong I never paid more then a compounded 15%).
> 
> ...


Switzerland has also many deductions and there is compulsory medical insurance that is not deducted from salary which is extremely expensive. Not to mention the compulsory 2nd pillar that is deducted from you salary and invested by poor performers (pension funds) at the end if you put all the deductions together (social security, taxes, 2nd pillar) + medical insurance you realize that Switzerland eats big part of your salary. Of course still better than rest of Europe but much worse than other locations. Dividends are tax at 35%, there is no capital gain tax but there is a net wealth tax applied ( the rate depends on the location). Not to mention that only few cantons are really tax efficient for individuals, which are by far the most expensive. Other cantons and in particular the west part of CH have high tax rates, just a bit lower than EU but not that much. If on top of it you consider the weather (crap) and people / life style (very boring) I believe that CH is not a big deal at all.


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## TonyJ1 (May 20, 2014)

ZHLB85 said:


> Hi all
> 
> I am an EU citizen, currently leaving in a non EU country and I was thinking to move to Portugal and apply for the NHR scheme. Reading around in various forums on the subject, I see that one requirement to apply for the NHR is to be tax resident in Portugal. Is this is a formality or really requires people to leave their country, move to Portugal, apply for NHR and then also risk that it will not be approved? In my case for example, if I leave my country for more than 183 days I automatically lose my residence permit / visa. My question is : is there a way (before moving to Portugal) to know before if my request will accepted? or I have to take the risk to relocate first, and then be said sorry but you are not eligible for NHR, in this case I would also lose residence in the country where I live?
> 
> It would be useful to your toughts and experiences from people who have been in a similar situation. Thanks


What is your profession / occupation - easy enough to see if the profession qualifies as a 'high value added' profession


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